Giant U.S. Pension Fund Calstrs to Propose Shift Away From Stocks, Bonds
Calstrs to discuss shifting up to $12 billion to Treasurys, hedge funds, other investments
By Timothy W. Martin .
Top investment officers of the California State Teachers’ Retirement System have discussed moving as much as $20 billion, or 12% of the fund’s portfolio, into U.S. Treasurys, hedge funds and other complex investments that they hope will perform well if markets tumble, according to public documents and people close to the fund.
The board of the $191 billion system, which is known by its abbreviation Calstrs, is expected to discuss the proposal at a meeting later today in West Sacramento, Calif. A final decision won’t be made until November.
The new tactic—called “Risk-Mitigating Strategies” in Calstrs documents posted on its website—was under discussion for several months as the fund prepared for a scheduled three-year review of how it invests assets for nearly 880,000 active and retired school employees. But the recent volatility around the world has provided a fresh reminder of how exposed Calstrs’ investments are when markets swoon.
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