June 16, 2015

School Employees Retirement System Earns 2.82% Return On Investment This Quarter

The Public School Employees’ Retirement System Tuesday announced the Fund’s investment performance for the quarter ended March 31, 2015. PSERS earned 2.82 percent for the quarter ended March 31, 2015 and added $1.2 billion in net investment income for the quarter.
PSERS’ Chief Investment Officer James H. Grossman Jr. commented on the quarter investment performance.
“We had a good first quarter return of 2.82 percent driven by strong returns from hedged non-U.S. equity exposure, Treasury Inflation Protected Securities exposure, real estate, risk parity, and our absolute return allocation. Active managers continued to provide value over passive alternatives during the past quarter,” Grossman said.
Top performing asset classes for the quarter included: Non-U.S. Equities, 8.10 percent, Absolute Return 5.09 percent, Risk Parity 4.70 percent and Real Estate 4.52 percent.
In addition, for the one-year period ended March 31, 2015 PSERS earned 7.93 percent and added $3.8 billion in net investment income.
PSERS also posted returns of 3.56 percent for the fiscal year-to-date, 8.77 percent for the three-year, 9.44 percent for the five-year, 6.58 percent for the 10-year, 8.31 percent for the 20-year, 8.63 percent for the 25-year, and 9.25 percent for the 30-year periods ended March 31, 2015.
Mr. Grossman also commented on the future markets outlook. “PSERS earned 3.56 percent for the fiscal year-to-date period ended March 31, 2015. We continue to be concerned about future expected returns. After years of global central banks holding interest rates very low and printing trillions of dollars, asset prices have been inflated by these easy money policies,” Grossman said. “We expect to see increased volatility in the financial markets as central bank monetary policies begin to diverge with the Federal Reserve looking to embark on interest rate increases while the European and Japanese central banks continue printing money through their quantitative easing programs.”
“In an environment of increased uncertainty and volatility, holding a broadly diversified investment portfolio is important given that the possible future outcomes are very diverse,” Grossmans said. “PSERS continues to hold a broadly diversified investment portfolio designed to provide for future liquidity needs while maintaining an appropriate level of risk to allow PSERS to endeavor to meet its long-term actuarial assumed rate of return.”
More detailed investment performance data as of March 31, 2015 is available on PSERS’ website.