Nevada Public Employees returns 7.2% for fiscal year

Nevada Public Employees' Retirement System, Carson City, posted a preliminary net return of 7.2% for the fiscal year ended June 30, outperforming the policy benchmark of 6.5%.

The results were disclosed in the latest investment report for the $46.6 billion pension fund.

Stephen Edmundson, the pension fund's investment officer, attributed the performance to rebalancing, saying that "after being overweight U.S. stocks for the entirety of 2019, it sold $2 billion in stocks at end of December and reallocated those assets into Treasuries."

In the following quarter "when stocks sold off sharply and Treasuries rallied 8%," Mr. Edmundson said it rebalanced $2.6 billion back into public equities, a move that occurred in the last two weeks of March as stocks recovered.

The pension fund also outperformed on a three, five- and 10-year basis. For the three, five and 10 years ended June 30, the pension fund returned an annualized net 8.1%, 7.7% and 9.6%, respectively, exceeding the three-, five- and 10-year respective benchmarks of 7.7%, 7.4% and 9.5%.

The pension fund returned a net 8.6% for the fiscal year ended June 30, 2019.

U.S. bonds were the fund's top-performing asset class last year, posting a net return of 10.2%, followed by domestic equities at 7.4%, private equity at 5.5% and private real estate at 3.6%. International equities returned a net -5%.

As of June 30, the actual allocation was 42% domestic equities, 27.4% domestic fixed income, 18.9% international equities, 5.7% private equity, 4.5% private real estate and 1.5% cash.

The target allocation is 42% domestic equities, 28% domestic fixed income, 18% international equities, and 6% each private equity and private real estate.