Merced County Employees tops benchmark with 25.1% return for fiscal year

Merced County (Calif.) Employees' Retirement Association had a preliminary net return of 25.1% for the fiscal year ended June 30.

The $1.1 billion pension fund's net return exceeded its policy benchmark return of 24.9%, according to a performance report included with board meeting materials for Thursday's meeting.

For the three, five and 10 years ended June 30, the pension fund had preliminary annualized net returns of 11.9%, 11.4% and 8.6%, respectively, compared with their respective policy benchmark returns of 10.8%, 11% and 9%.

The pension fund had a net return of 6.8% for the fiscal year ended June 30, 2020.

By asset class for the fiscal year ended June 30, emerging markets equities had the top preliminary net return at 53.9% (above its benchmark of 42.5%), followed by domestic equities at 41.5% (below its 44.2% benchmark), and private equity at 30.9% (42.9%).

Other preliminary net returns were international developed markets equities at 30.6% (below the 34.9% benchmark); hedge funds, 18.1% (18.1%); real assets, 16% (12.4%); opportunistic credit, 15% (6.4%); real estate, 5.5% (3.1%); and domestic fixed income, -0.3% (-0.3%).

As of June 30, the pension fund's actual allocation was 24.2% domestic equities; 17.1% domestic fixed income; 12.5% international developed markets equities; 9.6% emerging markets equities; 9.4% hedge funds; 7.5% real estate; 7.3% private equity; 6% opportunistic credit; 5.7% real assets; and the rest in cash.

Kristen Santos, retirement administrator, could not be immediately reached for further information.