Maryland State Retirement & Pension System, Baltimore, returned a preliminary 10.6% for the fiscal year ended June 30, net of fees, the board of trustees reported Tuesday.
The investment return exceeded the pension fund's 8.6% benchmark and represented a $3.2 billion gain for the retirement system, which reached $40.3 billion in assets.
“The strong performance was driven by public equities with significant value generated from active management,” Chief Investment Officer A. Melissa Moye said in a statement.
The fiscal year returns also exceeded the pension fund's 7.75% assumed rate of return, which the board voted to lower to 7.55%, according to minutes released Tuesday.
Spokesman Michael Golden said that, after consulting with the actuary and investment consultant, board members felt the higher rate “was still realistic, but there was a greater probability of meeting and surpassing” the lower rate going forward. The new assumed rate of return will be phased in by reducing the current rate 0.05% each year for the next four years.
Highest returns for the fiscal year came from public equity at 19.1%, followed by private equity at 11.7%, credit at 13.4%, real estate at 12.6%, absolute return at 3.4%, cash at 1.5%, and fixed income at 1.1%. The only negative performer was real return, which dropped 1.5%.
Maryland's asset allocation is 42.3% public equity, 16.2% fixed income, 12.6% real return, 8.4% credit, 7.3% absolute return, 6.2% private equity, 5.8% real estate and 1.2% cash.