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Pension Funds

Texas Teachers’ returns top benchmark in multiple periods

Texas Teacher Retirement System's net returns exceeded the performance of the pension fund's policy benchmark for all reported periods ended June 30 except the most recent quarter.

The $151.2 billion Austin-based pension fund returned a net 0.4% in the three-months ended June 30 (benchmark, 0.5%); one year, 9.2% (8.5%); three years, 7.7% (7.1%); five years, 8.7% (8.1%); 10 years, 6.6% (6.3%); and since inception July 1, 1991, 8.7% (8.2%). Multiyear returns are annualized.

The pension fund returned a net 12.9% in the year ended June 30, 2017, vs. 11.3% for the policy benchmark.

As of June 30, the pension fund had a 57.2% allocation to global equity — broken down into 17.6% U.S. equity, 13.3% non-U.S. developed markets, 13.2% private equity, 9.1% emerging markets and 4% directional hedge funds.

The stable value asset class had a total allocation of 17.7% — made up of 10.8% long U.S. Treasuries, 4.3% stable value hedge funds, 2.2% absolute return and 0.4% cash.

The pension fund's allocation to real-return strategies was 20% of the entire fund — 11.8% real assets; 4.9% energy, natural resources and infrastructure; and 3.3% Treasury inflation-protected securities. The category also includes commodities, but the allocation was zero as of June 30.

Texas Teachers' allocation to risk parity was 5.1% of total fund assets as of June 30.