US – The largest US pension fund, the California Public Employees' Retirement System, returned 23.3% last year and beat its benchmark by 200 basis points.
It was CalPERS’ best return since 25.3% in 1995 and takes its assets to 161.1 billion dollars, up 30.4 billion dollars on the end of 2002.
"Slow and steady wins the race," said Rob Feckner, chair of the Sacramento-based fund’s investment committee. "Our members can be assured that their financial future remains secure and the fund is well prepared to meet our benefit obligations."
The return exceeded the 8.25% average annual return needed to meet projected retirement obligations. "While we are encouraged that the outlook for our fiscal-year investment return will be good, we are not completely out of the woods," said Feckner.
"We are hopeful these gains will have a positive impact on employer contributions, but the benefits will be seen long-term, not immediately."
Sixty-eight percent of the fund is in equities, with 25% in bonds and other fixed income and seven percent in real estate.
CalPERS’ returns in 2003 by asset class:
US equities: 31%
International equities: 38.8%
Hedge funds: 16.7%
Corporate governance funds: 39.3%
International fixed income: 19.8%
US fixed income: 9.5%
Alternative (private equity): 1.8%
Real estate: 8.5%
The fund also re-elected Sean Harrigan as president and Feckner as vice president for 2004.