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Texas Teachers chalks up 4% quarterly return, up 10.8% over past 12 months

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Texas Teacher Retirement System's assets rose 4% in the quarter ended March 31 to $137.9 billion, thanks to strong investment performance.

The Austin-based plan returned 4.8% in the first quarter, topping the fund's policy benchmark return by 30 basis points, according to an investment report prepared for a board of trustees meeting Thursday. Investment gains totaled $6.3 billion in quarter, offset by benefit payments totaling $983 million.

Assets rose 7.6% in the year ended March 31, fueled by investment gains of $13.7 billion, offset by benefit payments of $4 billion.

Annualized returns for periods ended March 31 were: one year, 10.8%, (benchmark, 9.6%); three years, 6.2%, (5.7%); five years, 8% (7.4%); and 10 years, 5.5%, (5.3%).

In the quarter ended March 31, “both asset allocation positioning and manager value-added contributed to relative returns … manager selection in energy and natural resources had the single largest positive impact,” said staff in the performance report.

“Asset allocation and manager value-add both contributed positively” to the fund's one-year return, with “underweight positioning to long Treasuries” providing the biggest performance boost, “offset slightly by negative manager value-add in U.S. and non-U.S. developed (markets) equities,” the report said.

The fund's $6.9 billion risk-parity portfolio performed particularly well in periods ended March 31, topping policy benchmark returns: three months, 4.1%, (benchmark, 3.8%); one year, 13.1%, (11.3%); three years, 4.5%, (2.7%); and 10 years, 5.2%, (3.8%).