Merced County (Calif.) Employees' Retirement Association had a preliminary net return of 4.8% for the fiscal year ended June 30, said Kristen Santos, retirement plan administrator of the $860 million pension fund, in an email.
The return is 10 basis points above its policy benchmark of 4.7%. For the three, five and 10 years ended June 30, the pension fund returned an annualized net 8.8%, 5.8% and 9.2%, respectively, compared to its respective benchmarks of 9%, 6.2% and 9.5%.
The pension fund returned a net 9.2% in the fiscal year ended June 30, 2018.
Among asset classes whose returns were disclosed, domestic equities had the highest return with a net return of 8.2% (above its 7.3% policy benchmark return) in the fiscal year ended June 30, followed by fixed income at a net 6.8% (below its policy benchmark return of 7.2%).
Private equity had a net return of 6.1% (compared with 9.2%), followed by private real estate with 5.8% (5.5%); emerging markets equities, 2.8% (1.2%); hedge funds, 1.8% (1.4%); and international developed markets equities, -0.3% (1.1%). Opportunistic credit returns were not available.
As of June 30, the actual allocation was 27.1% domestic equities, 19.5% domestic fixed income, 12.5% international developed markets equities, 8.9% hedge funds, 8% emerging markets equities, 7% private real estate, 5.6% real assets, 4.8% opportunistic credit, 4.6% private equity, and the rest in cash.
The target allocation is 21% domestic equities; 18% domestic fixed income; 15% private equity; 10% each, hedge funds and international developed markets equities; 8% each, emerging markets equities and private real estate; and 5% each, opportunistic credit and real assets.
