CalSTRS chalks up 27.2% fiscal-year return

CalSTRS' portfolio earned a 27.2% net return in the fiscal year that ended June 30, outperforming its 24.9% benchmark, a news release showed.

The $308.6 billion California State Teachers' Retirement System, West Sacramento, also reported it earned 12.2% for the three years, 11.8% for the five years, 9.7% for the 10 years, 7.6% for the 20 years and 8.6% for the 30 years ended June 30.

CalSTRS has a 7% assumed rate of return.

"We've built our portfolio for long-term performance, but this year's results were nothing short of spectacular," CalSTRS CIO Christopher J. Ailman said in the news release.

The best performing asset class was private equity with a 51.9% net internal rate of return as of March 31, exceeding its 47.8% benchmark. (Private equity and real estate returns are lagged by one quarter.) Public equity earned a net return 41.8% for the year ended June 30, above its 41.2% benchmark; followed by inflation sensitive with 18% as of June 30, outperforming its 14% benchmark; innovative strategies at 11.7%, exceeding its 5.6% benchmark; real estate with 7.4% as of March 31, outperforming its 1.5% benchmark; risk-mitigating strategies at 6.3%, above its 5.5% benchmark; and fixed income at 1.2%, outperforming its 0.4% benchmark.

As of June 30, CalSTRS investment portfolio had 49.7% in public equity, 10.4% in fixed income, 12.3% in real estate; 12% in private equity, 8.6% in risk-mitigating strategies, 3.7% in inflation sensitive assets, 2.8% in strategic overlay and cash, and 0.5% in innovative strategies.

CalSTRS long-term target asset allocation as of June 30 was 49% to public equity, 14% to real estate, 13% to fixed income, 10% to private equity, 9% to risk-mitigating strategies and 3% to inflation sensitive.