The latest fiscal year's improved performance likely benefited from stronger market returns for the period in both equities and fixed income. For the year ended June 30, the Russell 3000 and Bloomberg U.S. Aggregate Bond index returned 19% and -0.2%, respectively, well above their respective returns of -13.9% and -10.3% for the year ended June 30, 2022.
Of the 74 U.S. public pension funds whose fiscal-year returns have been tracked by Pensions & Investments as of Sept. 27, the median return for the period was 7.6%.
For the most recent fiscal year, the pension fund's top-performing asset class was global equities, which returned a net 15.6% for the year ended June 30 (below the benchmark return of 16.5%); followed by private credit at 6.1% (8.3% benchmark); short-term cash, 3.8% (3.7%); opportunistic and tactical strategies, 2.7% (1.1%); global private equity, 2.5% (-4%); global real assets, 1.3% (-1.6%); and global fixed income, 0.7% (-0.9%).
As of June 30, the actual allocation was 42% global equities, 20.3% global real assets, 13% global fixed income, 12.9% global private equity, 5.9% global private credit, 3.2% opportunistic and tactical strategies, and 2.7% cash equivalents.
The target allocation is 45% global equities, 19% global fixed income, 17% global real assets, 12% global private equity, 5% global private credit and 2% cash equivalents.