CalPERS Fund Earns 20.1 Percent Return.SACRAMENTO Sacramento, city, United States Sacramento (săkrəmĕn`tō), city (1990 pop. 369,365), state capital and seat of Sacramento co., central Calif. , Calif.--(BUSINESS WIRE)--The California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Public Employees' Retirement System (CalPERS) earned a 20.1 percent return on its investments for the 12-month period ending March 31, 1996. This performance compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to returns for the previous one-year period, when the System earned an 8 percent return for the 12 months ending March 31, 1995. In a report delivered to CalPERS' Investment Committee, Wilshire Associates, the Fund's pension consultant, indicated that the strong performance of the Fund was helped by the Board's asset allocation Asset Allocation The process of dividing a portfolio among major asset categories such as bonds, stocks or cash. The purpose of asset allocation is to reduce risk by diversifying the portfolio. policy adopted in December of 1994. This policy, which serves as the most important component of CalPERS' investment strategy, calls for a three-year shift of the Fund's assets into the higher returning equity markets. CalPERS' one-year return on total equity investments yielded 26.8 percent. "The CalPERS fund has more than doubled over the last ten years due to continued top performance," said Charles P. Valdes, CalPERS' Investment Committee Chair. "A sound investment strategy, strong markets, top quality professional staff and a vigilant Board of Administration are in large part responsible for these results." In addition to the Board's asset allocation policy, the report indicated several other factors that helped performance: Active international equity and bond managers added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:
Currency hedging helped preserve local currency returns and minimized losses in dollar terms. Private equity investments returned the strongest single quarter performance ending March 31, 1996, earning a 10.5 percent return. The Fund's investment performance would have been higher, except for several market factors: U.S. bonds declined earlier this year due to rising interest rates and heightened fears of inflation. Global bond markets felt the pressure of inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. fears, posting mediocre me·di·o·cre adj. Moderate to inferior in quality; ordinary. See Synonyms at average. [French médiocre, from Latin mediocris : medius, middle; see medhyo- performance in local currency terms. The real estate market continued to lag other available investment opportunities in the short term. CalPERS manages assets totaling $99.6 billion. The System provides retirement and health benefits to one million current and retired public employees and their families. CONTACT: California Public Employees' Retirement Fund Brad Pacheco/Pat Macht, 916/326-3991 |
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