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| Q. Why does the WSIB hire outside managers to manage its
public equity portfolios? |
| A. There are many investment managers available
in the U.S. and international markets. There
is also a wide selection of management approaches and investing styles
available from which the WSIB can select. Because of the competition
and choices presented, there are cost advantages to outsourcing the
management processes. |
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| Q. When the WSIB contracts with outside investment
managers, what is the length of their contracts? |
| A. The length of a contract is a maximum of five years.
Most contracts are re-bid after five years. |
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| Q. Who are the WSIB’s public equity investment managers? |
| A. For a current listing of the WSIB’s investment managers, click here. |
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| Q. How does the WSIB monitor the manager’s performance? |
A. The WSIB has selected the best benchmark
available for each equity manager (Dow Jones Wilshire 5000, Russell
3000, MSCI EAFE + Canada, et cetera) and continuously monitors/evaluates
each manager against that benchmark. Active managers may underperform
over some periods and outperform over others but all of the active
managers are expected to outperform over the full market cycle (3-5
years). All of the index funds are expected to perform at or near
the benchmark return over a market cycle.
When a manager underperforms for a market cycle, the WSIB places that
manager on Watchlist. The manager is asked to respond in writing as
to what they are doing to improve performance. If the performance
improves, the manager is taken off the Watchlist. If the performance
does not improve, the manager is terminated and a replacement is sought. |
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| Q. What is a Watchlist? |
| A. If one of the WSIB’s equity managers underperforms
its designated benchmark over a market cycle (usually three to five
years) or has significant personnel or organizational changes, they
are put on "Watchlist". They remain on this list until their performance
improves or until any other issues stabilize. The manager is asked
to respond in writing as to what they are doing to improve the performance
of that option/fund. If performance improves, the manager is taken
off the Watchlist. If performance does not improve they can be terminated. |
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