The $68 billion Florida State Board of Administration may create a separate high-yield bond allocation, said Barbara Jarriel, acting executive director. Study by the board staff indicates the distinct return correlations could allow the addition to the board's retirement portfolio without appreciably increasing overall risk, Ms. Jarriel said.
One question is whether to classify high-yield bonds as a surrogate for equities, or to classify them as a subcomponent of fixed income. The board's consultant, Ennis, Knupp & Associates, is studying the issue. The board now has no high-yield bond investments.