Iowa Public Pension Fund Loses 3.9% in Fiscal Year 2022

Asset value of trust fund falls by more than $2.7 billion to end the year with just over $40.1 billion.

The Iowa Public Employees’ Retirement System’s investment portfolio lost 3.90% for the fiscal year ending June 30, as the asset value of its trust fund fell $2.72 billion to $40.13 billion. Despite the loss, the pension fund beat its benchmark by 15 basis points.

“IPERS is never pleased with a year of negative returns,” IPERS CEO Greg Samorajski said in a statement.  “Still, this year’s results are understandable given the factors that continue to challenge all investors. These include record inflation, ongoing unrest in Europe, rising interest rates, and the sharp decline in the global equity and fixed-income markets.”

Samorajski said IPERS saw better results in its real estate, private equity, private fixed-income and absolute return investments.

The pension fund reported three-, five, 10-, 20- and 30-year annualized returns of 8.80%, 8.55%, 8.60%, 7.96% and 8.52%, respectively. The portfolio’s benchmark returned 8.72%, 8.51%, 8.56%, 8.10% and 8.28% during the same time periods. IPERS’ assumed annual rate of return is 7.00%.

For the quarter that ended June 30, IPERS’ investment portfolio lost 7.53% net of fees. During the quarter, domestic equity assets were the worst-performing asset class, losing 16%, followed by international equity and global smart equity, which lost 13.32% and 12.88%, respectively. Public credit investments declined 10.05%, while core plus fixed income was down 5.78%.

The losses were somewhat offset by the fund’s private real assets, which returned 8.19%, while cash and private credit earned the portfolio 5.02% and 1.33%, respectively. All other asset classes reported losses for the quarter.

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