Massachusetts Pension Reserves Investment Management Board’s investment committee, at a Feb. 11 meeting, reported a 9.1% investment gain, net of fees, for calendar year 2024, trailing the 9.7% gain for PRIM’s policy benchmark.
The latest gain lifted the value of the Boston-based pension fund's portfolio to $109.7 billion, up from $105.2 billion as of June 30, which was the end of PRIM’s latest fiscal year.
U.S. large-cap equities remained the biggest driver of the calendar-year returns, with a 25% gain lifting PRIM’s exposures to that market segment to $24.3 billion, or just over 22% of the portfolio, and accounting for 5 percentage points of PRIM’s 9.1% gain.
Michael Trotsky, PRIM’s executive director and CIO, told the committee he was “very pleased” to have easily topped the fund’s targeted 7% annual return, even if 2024 was yet another year where any diversification away from U.S. large-cap stocks hurt returns.
The “narrowness of the market,” with big, high-flying technology firms such as NVIDIA and Microsoft accounting for close to 30% of key benchmark indexes, remained a challenge for “a diversified portfolio” such as Massachusetts’ Pension Reserves Investment Trust, he said.
For the calendar year, in addition to the 25% surge by U.S. large-cap stocks, other segments making positive contributions included “credit opportunities,” which returned 16.1%; U.S. small- and midcap equities, up 14.4%; and hedge funds, which returned 13.4%. U.S. high-yield bonds and bank loan exposures gained 9.1% and 8.6%, respectively.
For the year, the only segments suffering losses were U.S. bonds, down 13.9%, and real estate, which lost 3.1%.
