Texas Teacher Retirement System's net returns exceeded the performance of the pension fund's policy benchmark for all reported periods ended June 30 except the most recent quarter.
The $151.2 billion Austin-based pension fund returned a net 0.4% in the three-months ended June 30 (benchmark, 0.5%); one year, 9.2% (8.5%); three years, 7.7% (7.1%); five years, 8.7% (8.1%); 10 years, 6.6% (6.3%); and since inception July 1, 1991, 8.7% (8.2%). Multiyear returns are annualized.
The pension fund returned a net 12.9% in the year ended June 30, 2017, vs. 11.3% for the policy benchmark.
As of June 30, the pension fund had a 57.2% allocation to global equity — broken down into 17.6% U.S. equity, 13.3% non-U.S. developed markets, 13.2% private equity, 9.1% emerging markets and 4% directional hedge funds.
The stable value asset class had a total allocation of 17.7% — made up of 10.8% long U.S. Treasuries, 4.3% stable value hedge funds, 2.2% absolute return and 0.4% cash.
The pension fund's allocation to real-return strategies was 20% of the entire fund — 11.8% real assets; 4.9% energy, natural resources and infrastructure; and 3.3% Treasury inflation-protected securities. The category also includes commodities, but the allocation was zero as of June 30.
Texas Teachers' allocation to risk parity was 5.1% of total fund assets as of June 30.