Hawaii ERS Blasts Past Its Benchmarks

Pension fund returns 5.8%, a whole point-plus more than the goal.

The Hawaii Employees Retirement System (Hawaii ERS) beat its fiscal benchmark for the year ended June 30, bucking a trend as other public pension funds have missed their fiscal targets.

The $16.7 billion plan returned 5.83% in the period, 118 basis points above its 4.65% benchmark, confirmed Elizabeth Burton, Hawaii ERS’ chief investment officer.

“We are pleased to have outperformed our fund benchmark given the volatility over the past year, particularly toward the end of calendar year 2018 and earlier this spring,” she told CIO. “We are underwriting our port actively and proactively sourcing investment opportunities to prepare for future uncertainty and volatility.”

The fund also bested its three-, five-, and 10-year goals as well, returning 9.07%, 6.06%, and 9.2% over those timelines. Benchmarks for the trials were 8.08%, 5.3%, and 8.9%.

Fiscal 2019 results came from a combination of gross and net returns, but the numbers for how well each individual asset class did were unavailable as of press time. Hawaii ERS’ target allocation is 68% broad growth portfolio, 16% crisis risk offset, with the remaining 16% to be split between principle protection and real return portfolios.

The Hawaii plan returned 7.85% for the previous fiscal year, largely from alternatives and low-volatility equities. Asset mixes during that period were 74.68% broad growth, 12.86% crisis risk offset, 8.27% principle protection, and 3% real return, according to the fund’s Q2 2018 report. The rest was in opportunities and other assets.

Burton came aboard the fund last October.

Related Stories:

At Pension Bridge: New Hawaii CIO Speaks on Hedge Funds

Hawaii Retirement System Names Elizabeth Burton CIO

Pew: Hawaii’s State Pension Ready to Withstand Recession

Tags: , , , , ,