Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. PENSION FUNDS
April 13, 2020 11:21 AM

Maryland State Retirement CIO says fund in ‘good shape’

Diverse asset allocation key to weathering coronavirus storm

Brian Croce
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Andrew C. Palmer, CIO, Maryland State Retirement & Pension System


    The COVID-19 pandemic has wreaked havoc on nearly all facets of life in recent weeks. It's certainly dealt some challenges to the Maryland State Retirement & Pension System, Baltimore, as well, but Chief Investment Officer Andrew C. Palmer said the $56.1 billion pension fund is still in good shape.

    Despite a rough end to the first quarter — Mr. Palmer estimates that a portfolio with the system's allocation would roughly experience a -9% return for the quarter, though numbers from March are still coming in — he said the system's balanced portfolio headed off deeper losses.

    "We've got a good mix of assets and diversified risks," Mr. Palmer said. "We think we're doing better than plans with more concentrated exposures to equity markets now."

    As of Dec. 31, the pension fund's asset allocation was 50.7% growth equity, 19.4% rate sensitive and cash, 12.2% real assets, 8.9% credit/debt, 7.6% absolute return and 1.2% multiasset.

    Following the 2008 financial crisis, said Mr. Palmer, who joined the Maryland system in 2015, staff worked to better diversify the system's portfolio. "We decided we didn't want to have that much of our portfolio coming from one market's risk," he said. "We had a tremendous amount of U.S. equity risk at the time" of the financial crisis.

    Since the market volatility began in February, Mr. Palmer and his team — who have been working from home for the last four weeks — have rebalanced the system's portfolio "a bit at the margins ... but we haven't really made any large changes."

    See more of P&I's coverage of the coronavirus

    The investment committee next meets on May 19 and Mr. Palmer said stakeholders will likely discuss reviewing the system's asset allocation, particularly, "the role of long government bonds when at one point they're below 1%," he said. "They will still provide great diversification and deflation but it used to be that you could do that at 8% and it almost didn't cost you anything, now at 1% it's a trade-off. How much protection are you getting?"

    On the positive side, Mr. Palmer said the response from Washington has been quicker this time when compared to the financial crisis. "The market turned in 2009 when the Fed basically said, 'We're going to do what it takes,'" he said. "This took about two weeks for the Fed to pull out the bazooka to start addressing this stuff and the fiscal response has been more rapid. The timing and the policy is better than the financial crisis."

    Through February, the system had a net 3.1% return fiscal year-to-date, Mr. Palmer said. As of June 30, its funded status was 72.9%.

    "We really do feel like having a lower volatility portfolio is in the interest of the beneficiaries, so we're hoping that this is an example of how that works when it turns out not to be that painful overall," Mr. Palmer said. "We're in pretty good shape."

    Related Articles
    Maryland in-state investing program back on track
    Maryland State Retirement assigns $1.3 billion to 9 managers
    Maryland State Retirement lowers assumed rate of return
    Recommended for You
    NewMexicoEducational-Chalkboard_i.jpg
    New Mexico Educational records a rare positive fiscal year 2022 return
    ONLINE_190229846_AR_0_PCOJRZLIHGYW.jpg
    Milliman: Multiemployer pension funding slides 11 points in first half of 2022
    Los Angeles skyline_i.jpg
    Los Angeles County Employees posts 0.1% return for fiscal year, above benchmark
    Private Markets
    Sponsored Content: Private Markets

    Reader Poll

    August 10, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Gaining Momentum: Where Next for Trend-Following?
    The market opportunity in U.S. residential mortgage-backed securities
    Credit Indices Evolve with Enhanced Data Inputs
    Hedge Funds 2.0: Back to the future
    How Has 2022's Carnage Reshaped Global Stock and Bond Markets?
    Crossroads: Politics, Inflation, & Bonds
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    August 1, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit