New Mexico Public Employees Retirement Association, Santa Fe, rejected shifting its allocation to more fixed income in response to the recent market turmoil, said Robert Gish, CIO of the $10 billion association.
Under the associations investment policy, it is allowed with board approval to shift the asset mix to a heavier fixed-income allocation. The board opted not to shift the allocation, accepting Mr. Gishs argument that the time to have made the move would have been last year.
Last year, there was not sufficient evidence, in my opinion, for a trustee to make such a decision, Mr. Gish said. More recently, after sharp declines (in the market), the emotional tendency is to implement the strategy, but when the decision is easy to make, its probably too late.
The last time the strategy was implemented was in 1999.
The associations current target allocation is 40% U.S. equity, 25% international equity, 30% fixed income and 5% absolute return and hedge funds.