CalPERS’ investment committee at its Sept. 13 meeting will be asked to change its global fixed-income investment policy to reduce the targeted alpha and risk in its $46.6 billion fixed-income portfolio by 50%, according to attachments to the meeting’s agenda.
Proposed domestic investment range changes are U.S. Treasury and government-sponsored securities, 10% to 80% of the domestic fixed-income portfolio from zero to 80%; mortgages, 15% to 45% from 10% to 60%; corporate bonds, 10% to 40% from 10% to 50%; opportunistic, zero to 12% from zero to 20%; and sovereign debt, zero to 10% from zero to 15%.
For international weightings, U.S. Treasuries excluding TIPS would remain -10% to 10% of the international fixed-income portfolio; international government bonds would changed to 90% to 100% from 70% to 130%; investment-grade corporate bonds, -10% to 10% from -30% to 30%; mortgages, zero to 10% from zero to 30%; and non-investment-grade corporate bonds, zero to 5% from zero to 10%.
Separately, the committee will consider revising the $206.7 billion Sacramento-based California Public Employees’ Retirement System’s placement agent disclosure policy to conform to a state bill still under consideration by the Legislature requiring that certain placement agents register as lobbyists. Among other things, the revised policy would redefine “external manager,” in part, as a “person” rather than an “asset management firm” applying to or hired by CalPERS to manage securities or assets for compensation.
Under the revisions, disclosure would apply only to placement agent agreements that include compensation to an agent based on a CalPERS investment.
CalPERS’ total fund performance for the quarter ended June 30 was -4.6%. The fund returned 11.4% for the year, annualized -6.1% for the three years and annualized 2.7% from the 10 years, all ended June 30, according to the agenda.