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Pension Funds

Texas Teachers returns 12.9% for year, tops benchmark for all periods ended June 30

Texas Teacher Retirement System's net returns topped those of the pension fund's benchmark for every period ended June 30, showed an investment report from Aon Hewitt, the Austin-based retirement system's consultant.

The pension fund's returns as of June 30 were 3.6% for three months (benchmark, 3.4%); one year, 12.9% (11.3%); three years, 6% (5.6%); five years, 8.8% (8.1%); 10 years, 5.4% (5.2%); and since inception on July 1, 1991, 8.7% (8.1%). Multiyear returns are annualized.

During the quarter ended June 30, the pension fund grew 2.9% to $142 billion with $889 million of net withdrawals counterbalanced by $5 billion of investment gains, according to the investment report.

Texas TRS' global equity allocation as of June 30 totaled 59.9% of plan assets; within that allocation, 17.6% was in U.S. equities; 15.9% non-U.S. developed markets equities, 12.5% private equity, 9.9% emerging markets equities and 4% directional hedge funds.

Real-return strategies accounted for 19.6% of the pension fund's total portfolio, with 12% real assets, 3.9% energy/natural resources/infrastructure, 3.6% Treasury inflation-protected bonds and 0.1% commodities.

The total allocation to the pension fund's stable value portfolio was 15.5%, with a breakdown of 7.8% U.S. long Treasury bonds; 3.9% stable value hedge funds, 2.7% absolute-return strategies and 1.1% cash.

The remaining 5% was allocated to risk-parity approaches.