New Jersey Pension Fund Misses Benchmark with 10.75% Return in 2020

Portfolio returns 14.81% in first half of fiscal 2021 as asset value rises to $84.6 billion.

New Jersey’s pension fund returned 10.75% for calendar year 2020 to raise its total asset value to $84.6 billion as of Dec 31. However, this fell short of the portfolio’s benchmark’s return of 12.11% for the calendar year.

For the first half of fiscal year 2021, which began June 30, the pension fund’s investment portfolio was up 14.81% as of the end of December, outperforming its benchmark’s return of 13.94% during the same time period.

“We are confident that the pension fund has realized a strong recovery following a challenging [2020] fiscal year,” Corey Amon, director of the New Jersey Treasury’s Division of Investment, said during the most recent investment council meeting, according to NJ Spotlight News.

According to the New Jersey Division of Investment, the pension fund is outperforming its benchmark over the long term, but is underperforming over the shorter term. The fund reported three-, five-, 10-, and 20-year annualized returns of 8.1%, 9.24%, 8.26%, and 6.2%, respectively, compared with its benchmark’s returns of 8.75%, 9.97%, 8.01%, and 5.95%, respectively, over the same time periods.

US equities were the top performing asset class for the fund last year, returning 21.1%, followed by emerging market equities and private equity global growth, which gained 18.5% and 16.7%, respectively. Meanwhile, real assets was the worst performing asset class, losing 11.95% last year, followed by real return and real estate, which declined 5.17% and 2.5%, respectively.

The pension fund’s asset allocation as of the end of last year was 60.08% in global growth, 17.02% in income, 12.8% in defensive, 7.85% in real return, 1.56% in its police and fire mortgage program, 0.56% in opportunistic private equity, and 0.13% in other.

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