Oklahoma Teachers chalks up 11.4% return for fiscal year

Oklahoma Teachers’ Retirement System, Oklahoma City, posted a net return of 11.4% for the fiscal year ended June 30, according to an investment report prepared by Aon.

The return fell short of its policy benchmark of 13.7%.

Sarah Green, executive director of the $22.8 billion pension fund, attributed the underperformance to the policy benchmark it uses.

“Our policy benchmark has a large proportion of return coming from capitalization-weighted U.S. equity indices whose returns were propelled by a few large-cap tech companies,” she said in an email, explaining that the pension fund's U.S. equity portfolio is more diversified.

The pension fund also missed its benchmark on a three-, five- and 10-year basis, earning annualized net returns of 2.9%, 7.8% and 6.9%, respectively. The benchmark returns for their respective periods were 3.9%, 8.8% and 7.6%.

The pension fund had returned a net 8% for the fiscal year ended June 30, 2023.

In the latest fiscal year, U.S. equities were the pension fund’s top-performing asset class, returning a net 20.2%, followed by international equities, which returned 12.4%. Their respective benchmarks were 23.1% and 11.6%. Private investments and fixed income returned 9.5% and 5.1%, respectively. Their respective benchmarks were 20.2% and 4.9%. Real estate earned a -9.3% return, topping its benchmark of -11.5.

As of June 30, the pension fund’s actual allocation was 41.7% U.S. equities, 22.6% fixed income, 17.8% international equities, 7% real estate, 6.8% private investments, 2.7% private debt and the rest in cash. Its target allocation is 38.3% U.S. equities, 22% fixed income, 16.7% international equities, 10% real estate, 8% private investments and 5% private debt.