Texas Employees Retirement System, Austin, made changes to the investment lineup for its $3.1 billion defined contribution and $1.1 billion 457 plans, according to documents from a March 10 board meeting.
During the meeting, trustees approved adding the Fidelity International Index Fund to ERS' Texa$aver retirement plan program, spokeswoman Mary Jane Wardlow confirmed in an email.
Fund officers said in a report to the board that "a passive international fund would provide participants greater choice with the opportunity for a lower expense ratio and provide for greater diversification."
Two other new funds — BlackRock Mid Capitalization Equity Index F Fund and Wellington Management's WTC-CIF II Mid-Cap Opportunities Series 1, an actively managed fund — were added to the Texa$aver plans.
They replace two midcap funds that were terminated: First Eagle Fund of America (Y) Fund and Victory Munder Mid-Cap Core Growth (Y).
Separately, the Davis New York Venture A Fund was terminated and assets were transferred to Vanguard Institutional Index Fund, an existing plan offering, meeting materials said.
The reasons for the terminations and the amount managed in them were not provided in meeting materials.
In other news from the ERS board meeting, trustees overseeing the system's $30.9 billion defined benefit plan approved an amended pacing plan for the system's $2.4 billion private real estate portfolio for the fiscal year ending Aug. 31, and for the fiscal year ending Aug. 31, 2022, Ms. Wardlow said in her email.
Investment officers on the real estate team told trustees in their report that the 2021 tactical plan "proved to be overly conservative as the quick, unprecedented fiscal and monetary response lifted the stock market to new highs."
ERS officials recommended increasing real estate commitments for the fiscal year ending Aug. 31 to a $500 million target with an upper range of $800 million compared to the original $300 million target and a $600 million cap.
In the fiscal year ending Aug. 31, 2022, ERS will target $350 million for real estate investments with an upper limit of $700 million, the board book said.
ERS trustees also approved the first investment pacing plan for the system's opportunistic credit portfolio in the fiscal year ending Aug. 31, 2022.
The system established the opportunistic credit portfolio in 2017 with a 3% allocation of plan assets, but it has yet to be funded, Ms. Wardlow said.
ERS has private credit commitments and investments in other asset classes including real estate and hedge funds, which will not be moved to the opportunistic credit portfolio, the board book said.
The allocation for the fiscal year ending Aug. 31, 2022 will be up to $300 million with an initial focus on multistrategy/multiasset anchor investments and could include a commingled or fund-of-one structure, investment officials said in the board report.
