New York State Pension Loses $26 Billion in Asset Value in Q1

Common Retirement Fund reports 8.24% loss amid volatile markets, rising inflation and war.

The New York State Common Retirement Fund’s fiscal year 2023 got off to a rough start as its investment portfolio lost an estimated 8.24% for the first quarter, which ended June 30, to lower the pension fund’s asset value to an estimated $246.3 billion, according to a news release. The fund’s long-term expected rate of return is 5.9%.

“The first three months of the fiscal year brought upheaval to the financial markets amid Russia’s invasion of Ukraine, rising inflation and supply chain issues that continue to affect the economy,” New York State Comptroller Thomas DiNapoli said in a statement. “The fund’s prudent management and diverse holdings have helped make it one of the best-funded public pension funds in the nation and it remains well-positioned to weather the up and downs of the markets.”

Earlier this month, the pension fund reported a 9.5% return for the fiscal year that ended March 31, when its asset value climbed to $272.1 billion. However, not all of the $25.8 billion in lost asset value is a result of investment performance, as $3.69 billion in benefits was paid out to retirees and beneficiaries during the quarter.

The pension fund altered its asset allocation during the quarter, with the most significant change being a 5% reduction in publicly traded equities, which is not surprising considering the market volatility during the period. The fund used those assets to increase its real estate and real assets allocation by 2.1%; its private equity allocation by 1.36%; its cash, bonds and mortgages by 1.22%; and its credit, absolute return strategies and opportunistic alternatives allocation by 0.32%.

As of June 30, the pension fund’s asset allocation was 44.7% in publicly traded equities; 22.4% in cash, bonds and mortgages; 15% in private equity; 12.1% in real estate and real assets; and 5.8% in credit, absolute return strategies and opportunistic alternatives.

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