Market Rebound Spurs Record 33.55% Return for NY State Pension Fund

Equities helped boost the investment portfolio’s asset value by more than $60 billion to $254.8 billion.

The New York State Common Retirement Fund (NYSCRF) reported a 33.55% investment return for the fiscal year ending March 31, the largest one-year investment return in the fund’s history. It easily beat its long-term expected rate of return of 6.8%.

The performance, which reflected the financial markets’ rebound from last year’s market crash after the COVID-19 pandemic first hit, raised the fund’s asset value to an estimated $254.8 billion from $194.3 billion as of the end of fiscal year 2020.

The New York fund lost about 2.7% in the previous fiscal year, which ended as the pandemic closed down a lot of the country and sent markets skidding.

“The state pension fund rode the market rebound from the depths of the pandemic and enjoyed the largest one-year investment return in its history,” New York State Comptroller Thomas DiNapoli said in a statement. “This outsized return reinforces the fund’s position as one of the strongest in the nation.”

However, DiNapoli cautioned that the historic returns come with a warning: “Markets remain volatile and as unpredictable as ever,” he said. “With our talented investment staff, I will continue to manage our state’s pension fund with prudence and a focus on stable, long-term results.”

The investment performance was led by global and domestic equities, which returned 64.58% and 61.40%, respectively, followed by non-US equities, which gained 54.57% during the year.

The portfolio’s real estate investments were the weakest-performing asset class, aside from cash, returning 2.19%, followed by fixed income, which returned 2.61%. Real assets was the only other asset class that didn’t end the year with double-digit returns at 7.34%.

Among the portfolio’s other asset classes, private equity and credit returned 23.83% and 20.38%, respectively, followed by opportunistic/absolute return, which returned 19.69%.

As of the end of fiscal year 2021, the fund’s asset allocation was 33.58% in domestic equities, 20.82% in fixed income, 13.64% in non-US equities, 10.57% in private equity, 6.75% in real estate, 5.60% in global equities, 3.26% in credit, 2.32% in cash, 1.97% in opportunistic/absolute return strategies, and 1.49% in real assets.

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