04 Sep Missouri Education chalks up 6.9% return, shy of benchmark
Missouri Education Pension Trust, Jefferson City, reported a return of 6.9% net of fees and expenses for the fiscal year ended June 30, said Craig Husting, chief investment officer, in an email.
The return fell short of the total plan policy benchmark return of 7.3%.
For the three, five and 10 years ended June 30, the trust returned an annualized net 9.3%, 6.7% and 9.7%, respectively, ahead of the respective benchmark returns of 8.6%, 6.2% and 9.1%.
The trust returned a net 8.7% for the fiscal year ended June 30, 2018.
Preliminary returns by asset class were led by private equity, which returned 15.3%, well above its 9% benchmark return, followed by credit at 8.1%, slightly below its 8.2% benchmark return.
Other asset class returns were led by domestic equities, which returned a preliminary 7.4% for the fiscal year ended June 30, below its 9% benchmark return. Following were U.S. Treasuries at 7.3%, slightly above its benchmark return of 7.2%; real estate, which returned 6.5%, above its 5.5% benchmark return; private credit at 5.7%, below its 7.6% benchmark return; hedged assets at 4.9%, below its benchmark return of 7%; U.S. Treasury inflation-protected securities at 4.7%, equal to its benchmark return; and international equities at 4.6%, above its benchmark return of 1.3%.
Mr. Husting said that hedged assets, private credit, private equity and real estate returns are all returns net of fees, carries and expenses, while all other assets are partially net of fees and expenses.
As of June 30, the actual allocation was: 27.7% domestic equities; 16.1% international equities; 13.9% U.S. Treasuries; 11.8% hedged assets; 11.5% private equity; 8.3% real estate; 4.4% credit; 3.2% U.S. TIPS; 1.9% cash and cash equivalents; 1% private credit; and 0.2% other.
The target allocation is: 27% domestic equities; 16% U.S. Treasuries; 15% international equities; 12% credit; 10.5% private equity; 7.5% real estate; 6% hedge assets; 4% U.S. TIPS; and 2% private credit.
The Missouri Education Pension Trust consists of the combined $45.3 billion in assets of the Public School Retirement System and Education Employee Retirement System.