After spending several years shifting money into stocks from bonds, the board of the $6.7 billion New Mexico Educational Retirement Board has adopted a new asset allocation with an even higher equity target, said Frank Foy, chief investment officer.
The new target allocation -- approved by the board in October --is 70% equities and 30% fixed income.
In the past, the Santa Fe-based fund had as much as 80% in fixed income, Mr. Foy said. Starting more than three years ago, it undertook a massive, but gradual, restructuring of its investments.
In 1997, the fund had 52% in stocks and 47% in fixed income, with the remainder in cash equivalents. By 1998, the mix was close to 50/50. As of Sept. 30, 63% of the fund actually was invested in equities and 36% was in fixed income.
Fund officials next may be conducting a search for an emerging markets money manager. Emerging markets is a new asset class for the fund; the money would come out of the current fixed-income allocation, said Rose Struck, a portfolio manager.
Watson Wyatt conducted the asset-liability study from which the new asset allocation was derived. No searches are planned to achieve the new target allocation, according to Mr. Foy.