Baton Rouge, La.
Louisiana Municipal Employees' Retirement System, Baton Rouge, posted a preliminary net return of 9.2% for the fiscal year ended June 30, well above the policy benchmark return of 7.5% for the period, according to an investment report on its website.
For the three, five and 10 years ended June 30, the $1.1 billion pension fund returned an annualized net 6.7%, 5.6% and 4.5%, respectively, compared to the respective benchmarks of 5.3%, 5.3% and 6.3%.
MERS had posted a net loss of 10.9% for the fiscal year ended June 30, 2022.
The latest fiscal year's significant improvement over the prior period reflects improved returns both in public equities and fixed income. For the year ended June 30, the Russell 3000 and Bloomberg U.S. Aggregate Bond index returned 19% and -0.2%, respectively, well above the respective returns of -13.9% and -10.3% for the year ended June 30, 2022.
Domestic equities was the top performing asset class for the pension fund, with a preliminary net return of 19.8% (above the 19% benchmark), followed by international developed markets equities at a net 16.8% (below its 18.8% benchmark); emerging markets equities, 9.8% (1.7%); private debt, 5.2% (11.2%); high-yield bonds, 1.9% (9.1%); non-core real estate, 0.0% (-1.6%); international fixed income, 1.1% (-1.3%); domestic core fixed income, -0.9% (-0.9%); Treasury inflation-protected securities, -1.4% (-1.4%); and core real estate, -6% (-10.5%).
As of June 30, the pension fund's actual allocation was 35% domestic equities, 18.2% domestic core fixed income, 12.7% international developed markets equities, 10.3% emerging markets equities, 8% core real estate, 4.9% high-yield bonds, 4% international fixed income, 3.5% private debt, 2.7% TIPS, 0.4% cash and 0.3% non-core real estate.
The target allocation is 33% domestic equities, 20% domestic core fixed income, 13% international developed markets equities, 12% core real estate, 10% emerging markets equities and 3% each high-yield bonds, international fixed income, private debt and TIPS.
