NJ State Investment Council Takes a 1.41% Hit from Fall Stock Shock

Wednesday’s rally helped recover some broad US equity losses, acting director of investment says.

New Jersey’s $74.6 billion State Investment Council has been on the ropes this fall as market swings have fractured its investment gains.

In the first trimester of its fiscal year, which began in July, the public-worker pension plan suffered 1.41% losses from the recent stock slump.

Aside from US Treasuries, Corey Amon, the fund’s acting director of the investment division, told fellow council members that “there really haven’t been any places to hide” assets from the hit, according to NJ.com.

He did mention that the Investment Council has “since bounced back” about 4% lately in the broad US equity markets. This is due to a brief rally starting Wednesday after Federal Reserve Chairman Jerome Powell announced that interest rates are “just below” the level of neutrality, meaning the central bank is almost at the point where it will neither raise nor lower rates. That suggested to Wall Street that the Fed’s rate hike campaign may be ending soon.

According to investment reports, the fund’s 1.41% slide occurred between July 1 and October 31 (the fund’s benchmark lost 0.68%). However, the public plan was up 0.87% for the calendar year.

“It’s been a very choppy market, and we’re trying to both maintain a stable investment philosophy, but also I think it’s going to be difficult to anticipate what happens in the next few months,” Adam Liebtag, acting chairman of the State Investment Council, told NJ.com. “You know, the market wiped out all of its annual returns in October, and now they’re rebuilding it. So, it’s going to be a very choppy time.”

Liebtag stressed that he is “very concerned” for the fund’s investing strategy. He said the council’s investment division will “put that concern into action when we do asset allocation planning for next year.”

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