State of Wisconsin Investment Board’s all-equity variable fund returned 33.7% for 2009, its highest annual return since the portfolio was formed in 1982, according to a statement by the Madison-based system.
SWIB’s diversified core fund returned 22.2% for the year.
Both the variable and core funds outperformed their customized benchmarks of 32% and 19.9%, respectively, over the same 12-month period.
The variable fund had $5.1 billion in assets and the core fund $67.8 billion as of Dec. 31, according to SWIB’s preliminary data.
Overall, the two funds generated a combined $1.2 billion in investment gains beyond their benchmarks to the trust funds in 2009, preliminary data shows.
The variable fund is allocated exclusively to domestic and international equities, while the core fund is allocated to domestic and international equities, fixed income, real estate and private equity.
“SWIB was well positioned to take advantage of the market recovery because we rebalanced to our long-term stock targets when the markets were at their lowest levels,” Keith Bozarth, SWIB executive director, said in the statement.
David Villa, SWIB chief investment officer, said in the statement, “Our outlook for 2010 remains cautious. Concerns about unemployment levels, weakness in consumer spending and uncertainty about the future impact of the unprecedented amount of government fiscal and monetary stimulus remain. Credit risks continue to impact global markets as well.”
Some 20% of system members voluntarily participate in the variable fund, electing to put half of their contributions in it, instead of all their contributions in the core fund.
SWIB oversees $78 billion in total assets.