Oklahoma Teachers posts 4.76% return, falling well short of benchmark

Oklahoma Teachers' Retirement System, Oklahoma City, posted a net 4.76% return on investment for the fiscal year ended June 30, Tom Spencer, executive director of the fund, said in an email.

That's below the 6.99% benchmark return and the pension fund's 7.5% assumed rate of return.

"We wish we had done a lot better. We don't usually finish in the bottom half of public funds," Mr. Spencer said, referring to other statewide plans for state employees or teachers.

The annualized three-, five and 10-year net returns as of June 30 were 9.67%, 5.81%, and 10.63%, respectively, according to Mr. Spencer. The benchmark returns for the respective periods were 9.61%, 6.32% and 10.34%.

Mr. Spencer attributed the weak performance to the fund's traditional overweighting to small-cap and midcap stocks, which this year were "particularly hard hit relative to large-cap stocks." In addition, poor performance in the fund's master limited partnership allocation dragged down investment returns, Mr. Spencer said.

On the plus side, the fund benefited from strong performance in both private equity and non-core real estate, which earned 19.56% and 20.17%, respectively, for the year ended June 30. Other top-performing asset classes were fixed income (8.76%), core real estate (5.76%), and domestic equity (5.69%).

International equity and MLPs were both down for the year, falling 2.86% and 2.93%, respectively.

The fund's target asset allocation is domestic equity (38.5%), international equity (19%), fixed income (23.5%), real estate (9%), private equity (5%) and MLPs (5%). The fund posted a 5.22% return for the 2018 fiscal year.