Trustees of the $1.7 billion Retirement Board of the City of Boston will review five poorly performing managers at a meeting March 28, and may drop some of them depending on their explanations for their poor performance, said Mike Travaglini, executive officer. The fund earned a 24% return last year ``which at first blush looks great, but a number of other public funds did better,'' he said. Mr. Travaglini wouldn't identify the managers, but said three manage domestic equities; one, fixed income; one, international equities.
``When a manager does poorly relative to its peers for a period of time, we think you should ask that manager why, and if it has a plan to address that,'' Mr. Travglini said.
The $3.7 billion Idaho Public Employee Retirement System, Boise, increased international equity to 15% of assets from 12%, and reduced fixed-income to 30% from 33%. The changes resulted from an asset allocation study.
CIO Robert Maynard said the new allocations to non-U.S. equities will be shared equally with existing managers: BEA for emerging markets; Schroder, TCW and Rowe Price-Fleming for broad international equities accounts; and Mellon for indexing.
In addition, the fund folded real estate into U.S. equities, creating a U.S. equity allocation of 54%, up from 48%. Real estate was targeted at 6% of assets, but in reality was at 4%. The fund also allocated 1% to cash.
Taft-Hartley pension plans were the top performers in the year ended 1995, with a median return of 29.6%, according to data compiled by SEI Capital Resources.
Next were corporate pension funds with more than $100 million in assets, which returned 27.5%. Corporate funds with less than $100 million returned 27.1%.
Jim Greene, director of the product/research group at SEI, speculates the union funds' good performance might have to do with their smaller weightings in non-U.S. markets. In 1995, international markets were up significantly less than U.S. stock markets.
Among other tax-exempt funds: endowments and hospitals returned 26.6%; local governments, 26.1%; state funds, 23.5%; and foundations, 25.6%.
The $79.8 billion Teachers Insurance and Annuity Association reported investment income of 8.29% for 1995. TIAA has $28 billion in mortgages and real estate and $49 billion in direct placements and publicly traded bonds.
TIAA said the insurance industry's investment income was an average 7.61% for the year, based on estimates from the American Council of Life Insurance.
The $4.2 billion New Mexico Public Employees' Retirement Association, Santa Fe, is seeking an investment adviser to assist with an internally managed $100 million short-term portfolio, said Jeffrey W. States, director-investments.
The assets will be shifted from cash reserves now being held by the association's equity managers.
Wilshire is assisting.
The $900 million U.S. 401(k) plans of Northern Telecom Inc., Nashville, added four investment options. Delaware Management will run an international equity commingled fund.
Three mutual funds were added: Baron Asset Fund, a small-cap fund run by Baron Capital Management; Mutual Qualified Fund, a growth and income fund run by Heine Securities; and DFA 6-10, a passive small-cap fund run by Dimensional Fund Advisors.
Four existing options are managed by Bankers Trust; the fund also has a company stock option.
The $29.2 million Chase Capital Preservation Fund, New York, named Dwight Asset Management as a subadviser.
The GIC alternative fund for defined contribution plan sponsors had been run in-house.
Chase also named Regis Retirement Plan Services to market and distribute the fund. Both Dwight and Regis are United Asset Management affiliates.
The Pioneer Group picked Boston Financial Securities as subadviser to the $27 million open-end Pioneer Real Estate Shares, a mutual fund that invests primarily in equity securities of REITs and other real estate industry companies. While Boston Financial will be providing advice on investments, the fund will continue to be managed in-house by Pioneer.
Winthrop Financial Associates had been the subadviser until last July. The relationship was dissolved when Winthrop's ownership changed hands.