US – The US’s largest pension fund, CalPERS, has announced positive returns for the year to the end of June 2003.
The California Public Employees’ Retirement Scheme’s return on investments was 3.9% ending a two-year run of negative returns. For the year ending June 2002 it lost 5.9%, on top of a 7.2% decline a year earlier. Between June 2000 and the end of October 2002, CalPERS’ assets fell from 172 billion dollars to 132.6 billion dollars.
Between June 2002 and June 2003, the fund generated 4.8 billion dollars in profit after benefit payments and contributions, and assets at the end of June stood at 144.8 billion dollars.
“Despite a rough two years, we kept faith in the strategic asset allocation decisions made by CalPERS board, and remained confident in the long-term return of the equity markets and the economy,” said Mark Anson, CalPERS’ chief investment officer.
The results will be welcomed by the board. In February CalPERS admitted that one more fiscal year of negative returns could lead to an underfunded status for some employers. Annually compounded over the last 10 years, CalPERS’ returns were 8.3%.
The fund says its investment performance was aided by “a well diversified investment portfolio and strong gains in individual asset classes”.
Global fixed income investments returned 16.9%, US stocks returned 1.4% and real estate returned 6.8%. These gains were offset by negative performance of global equities, and private equity and venture capital which returned –5.5% and –10.6% respectively.
US and international stocks currently represent approximately 60% of CalPERS’ assets. US and international bond investments currently represent 27%; real estate eight percent and private equity investments represent five percent of assets.
CalPERS provides retirement and health benefits to 1.3 million state and local public agency employees and their families.