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CalPERS reports preliminary 11.2% investment return for fiscal year 2016–2017

by Jody Barhanovich

The $327 billion California Public Employees’ Retirement System has reported a preliminary 11.2 percent net return on investments for the 12-month period that ended June 30, 2017. CalPERS’ assets at the end of the fiscal year stood at more than $323 billion.

The strongest returns came from the public equity program, which generated a 19.7 percent return. Private equity’s preliminary net returns were 13.9 percent, followed by real estate, with preliminary net returns of 7.6 percent.

“Our globally diversified portfolio performed well across most asset classes, and we were able to take advantage of what the market gave us,” said Ted Eliopoulos, CalPERS chief investment officer. “We will continue to work towards reducing the cost, risk, and complexity of the portfolio while also achieving the returns necessary to pay pensions the public service workers of California have earned.”

Based on these preliminary fiscal year returns, the funded status of the overall CalPERS fund is an estimated 68 percent, an increase of 3 percentage points from the previous fiscal year. This estimate is based on a 7 percent discount rate.

This brings total fund performance to 8.8 percent for the five-year time period, 4.4 percent for the 10-year time period, and 6.6 percent for the 20-year time period.

“CalPERS is focused on the long-term sustainability of our system,” said Marcie Frost, CalPERS’ chief executive officer. “Of course, we welcome this fiscal year’s strong returns, but we also remain about 68 percent funded and vulnerable to a downturn in stock markets. This will be our focus as we continue to move through the asset allocation process over the next six months.”

 

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