Arizona State Retirement System, Phoenix, could add new allocations to emerging markets debt and private debt along with increasing allocations to international developed and emerging markets equities, under an asset allocation study to be considered by the $27.8 billion retirement system.
The study by investment consultant NEPC will be presented to the retirement system's investment committee at its April 30 meeting, confirmed spokesman David Cannella.
Mr. Cannella said the study will be sent to the retirement system's board for approval at its May 18 meeting. Any decisions on changes in managers will be made by investment staff after that date.
According to presentation materials on the retirement system's website, international large-cap equities would increase to 14% from 13%; international developed small-cap equities to 3% from 2%; and emerging markets equities to 6% from 3%.
New allocations to emerging markets debt and private debt would be set at 4% and 3%, respectively. Domestic high yield would be increased to 5% from 2%, real estate would be increased to 8% from 6% and commodities would be increased to 4% from 3%. Private equity would remain the same at 7%.
In addition, new allocations to infrastructure and farmland/timber would be created, with each having a target of zero and a target range of zero to 3%.
All domestic equity allocations would be reduced, with large cap down to 23% from 28% and midcap and small cap each cut to 5% from 6%. Domestic core fixed income would be reduced to 13% from 24%.