New York State Common Retirement Fund, Albany, returned an estimated 13.02% for the fiscal year ended March 31, state Comptroller Thomas DiNapoli, the sole trustee of the pension fund, said Monday. For the previous fiscal year, the audited return on investment was 10.38%.
Fund assets reached an estimated $176.2 billion — a record — up 9.6% from the end of the previous fiscal year. Audited results for assets and returns will be available in about two months.
The estimated return exceeded the 7.5% expected rate of return that the pension fund uses as a benchmark.
In a telephone news conference, Mr. DiNapoli said the pension fund has always used the expected rate of return as a benchmark rather than create a customized benchmark based on various indexes. “It's a better bottom-line measurement,” he said.
Despite financial markets giving investors “a wild ride” in recent years, the pension fund's effort to diversify its portfolio “has allowed us to capitalize on opportunities and minimize risks,” he said.
Mr. DiNapoli said the funding ratio stood at 88.7% as of April 1, 2013. Given the strong performance for the just-completed fiscal year, Mr. DiNapoli predicted that the ratio will rise, but a figure won't be available until August.
Among asset categories, the strongest investment returns were for global equity (25.1%), domestic equity (22.3%), real estate (18.7%) and private equity (17.5%). The weakest asset classes were Treasury inflation-protected securities (-6.2%) and core fixed income (-0.2%). Investment returns for the other asset classes were non-U.S. equities (13.2%), absolute-return strategies (9.9%) and opportunistic alternatives (7.8%).
Domestic equity at 37.7% of the total portfolio and core fixed income, at 21.4%, represented the largest asset classes in the pension fund.
Mr. DiNapoli said the pension fund expects to complete by early 2015 an asset allocation study, an analysis it does every five years.