Arizona State Retirement System, Phoenix, is conducting a study comparing internal asset management with external. The $23 billion defined benefit plan manages 30% of its assets internally, said Paul Matson, chief investment officer. The plan reduced its 35% domestic fixed-income allocation to 30% of total assets. It has increased its domestic equity allocation by three percentage points, and international equity, two percentage points. The system has completed funding of the $330 million passive midcap domestic equity portfolio, which State Street was hired to manage earlier. Funding came from the reduction to fixed income. Mercer assisted.