Skip to Content

What Every Employer Should Know

Investment Strategies

The Common Retirement Fund has a long-term, solid track record of exceptional market performance. The Fund’s historical success is principally due to a sound investment strategy based on the Fund's asset allocation and diversification policies.

The Fund’s assets are diversified among various classes including domestic and international equity, fixed income, inflation-indexed securities, real estate, private equity, opportunistic funds and absolute return strategies. Investments in domestic, international and private equity provide superior performance and growth characteristics, while historically less volatile fixed income investments provide predictable cash flow to meet the System’s funding requirements and pension obligations.

Investment Results — Based on Market Values as of March 31, 2013

  Annualized Rate of Return
1 Year 3 Years 5 Years 10 Years

These figures are for investment management purposes and may not agree with audited statements.

Investment return calculations were prepared using a time-weighted rate of return. Private Equity and Real Estate are reported on a three-month lag and Absolute Return Strategy on a one-month lag (adjusted by cash flows).

Total Fund 10.38% 10.25% 4.43% 8.67%
Global Equity 13.12% 10.70% 4.41% 9.29%
Private Equity 11.75% 12.90% 4.36% 14.91%
Equity Real Estate 11.08% 18.31% (4.22)% 10.62%
Absolute Return Strategy 7.95% 4.41% 1.31%
Treasury Inflation Indexed Securities 7.67% 11.23% 7.26% 7.52%
Core Fixed Income 4.65% 7.10% 6.76% 6.25%
Short-Term Investments 0.32% 0.39% 0.71% 2.38%
Benchmarks
MSCI All Country World Index Free 10.55% 7.78% 2.06% 9.36%
Cambridge U.S. Private Equity Index 13.81% 15.04% 6.03% 15.10%
National Council of Real Estate Investment Fiduciaries (NCREIF) 10.54% 12.63% 2.13% 8.44%
HFRX Global Hedge Fund Index 2.74% 0.45% (2.36)% 1.68%
Salomon Smith Barney Inflation Linked Index 5.71% 8.81% 5.98%
Barclays Capital Aggregate Bond Index 3.77% 5.52% 5.47% 5.02%

The Fund’s asset allocation and diversification strategy was constructed to achieve a maximum level of return with minimal risk. Since the Fund’s assets are protected, current and future benefits can be paid to the System’s participants while minimizing employer contributions.

Asset Allocation — March 31, 2013

Asset Type Long-Term Policy Allocation Allocation as of March 31, 2013 Current Interim Policy
Equity
Domestic Equity 30.0% 36.0% 36.0%
International Equity 13.0% 17.0% 15.5%
Alternatives
Private Equity 10.0% 8.6% 9.0%
Real Estate 6.0% 6.8% 6.0%
Absolute Return 4.0% 3.2% 3.0%
Opportunistic Portfolio 4.0% 0.2% 1.0%
Real Asset 3.0% 0.0% 0.0%
Bonds, Cash & Mortgages 22.0% 20.6% 21.0%
Inflation Indexed Bonds 8.0% 7.6% 8.5%