FedEx Corp.'s U.S. defined benefit plan has moved to a liability-driven investment strategy “with a greater concentration of fixed-income securities to better align plan assets with liabilities,” according to the firm's latest annual report.
Asset allocation data in the annual report showed fixed-income securities accounting for 47% of FedEx's portfolio as of May 31, the end of the Memphis, Tenn.-based company's fiscal year, up from 32% the year before.
Despite the strong rebound for global equity markets in the 12 months through May, the firm's allocations to domestic and international equities slipped to 35% and 12% respectively, from 38% and 16% the year before. Cash, meanwhile, accounted for 3% of the portfolio, down from 10% the year before, while private equity held steady at 3% and “other” investments fell to zero from 1%.
In an e-mailed response to questions, FedEx spokesman Jess Bunn said company executives couldn't provide further comment ahead of the company's mid-September earnings announcement.
According to the annual report, FedEx's U.S. defined benefit plan was underfunded by $1.2 billion as of May 31, compared with $238 million in underfunding the year before.
The plan's assets totaled $13.1 billion on May 31, up 23% from the year before.