San Diego County Employees Retirement Association board on Thursday made a slight change to its asset allocation for fiscal year 2022, following its annual asset allocation review.
The board of the $16.1 billion pension plan revised the upper limit of its risk-reducing fixed income to 30% from 25%, while retaining its 19% policy target to the asset class. The risk-reducing fixed-income portfolio can go as high as 30% and as low as 13% of its total fund assets. SDCERA made the tweak because as stock prices continue to rise rapidly, staff is investing gains from equities in risk-reducing fixed income. San Diego County's pension contribution expected in July as well as distributions from the $696 million private equity portfolio will also be invested in risk-reducing fixed income to decrease the percentage of plan assets in return-seeking asset classes, CIO Stephen Sexauer told the board on Thursday. Currently, SDCERA's $3.8 billion risk-reducing fixed income portfolio accounts for 23.5% of total plan assets.
SDCERA's asset allocation targets for fiscal year 2022 remain unchanged with 50% in equities, 19% in risk-reducing fixed income, 10% real estate, 6% each return-seeking fixed income, opportunistic and private equity, and 3% private real assets.