The $175bn New York City Retirement Systems reported higher-than expected growth in the beginning of 2017, but its CIO warned against complacency, saying that some of the factors driving that growth are not sustainable in the long run.

The funds’ fiscal year performance to date was in the nine to 11% range, well above the city’s assumed 7% rate of return, CIO Scott Evans said at the funds’ quarterly public meeting. But with much of the growth driven by “ebullient” markets, the funds remain in a “dicey situation, fraught with risk,” he said.

“This is not normal – rates are low, valuations are extremely high, and volatility is extremely low,” Evans said. “This is as good as it gets, so we should not be complacent. We should be sure to rebalance frequently to keep our portfolio taut, because we’re going to get hit by a wave sooner or later. We can’t predict when it will come.”

The systems are concerned about the level of quantitative easing, which has been high ever since the 2008 financial crisis, mixed market signals stemming from low Treasury yields and high stock prices, and uncertainty around the possibility that President Donald Trump will appoint a new U.S. Federal Reserve chair with different policies than current chair Janet Yellen.

Read the full story: NYC retirement system reports growth, but warns that good times may not last

Published by Money Management Report/Pageant Media.