Rhode Island Pension Fund Returns 11.6%

Asset value rises to $8.2 billion under ‘Back to Basics’ strategy.

Rhode Island’s pension fund earned more than $872 million and returned 11.6% for the fiscal year ending Sept. 30, bringing its total asset value to $8.2 billion from $7.7 billion at the same time last year.

The returns surpassed the plan’s 11.1% benchmark, and a traditional 60/40 stock-bond portfolio, which would have earned 10.9%, and is up from last year’s net return of 7.4%.  The fund also reported three-, five-, and 10-year annualized returns of 5.9%, 7.6%, and 4.5%, respectively, compared to its benchmark, which returned 5.7%, 7.1%, and 4.4% annualized over the past three, five, and 10 years, respectively.

For September, the total portfolio value increased by approximately $23.6 million. According to Rhode Island’s Office of the General Treasurer, the month’s $74.4 million of positive investment performance was offset by $50.9 million in transfers to meet pension payroll in excess of pension contributions. It also reported that on a percentage basis, the portfolio increased 0.91% net of fees, underperforming the plan’s benchmark, which earned 1.01%, and the 60% global equity/40% fixed-income benchmark, which gained 0.97%.

For the calendar year-to-date, the total portfolio rose $497.9 million, with net gains of $790.7 million, which were offset by $292.8 million in pension payments. The portfolio’s 10.42% net return outperformed the strategic benchmark of 10.39%, but fell short of a 60/40 portfolio, which would have returned 11.43%.

The results were the first full-year earnings since Rhode Island Treasurer Seth Magaziner launched his “Back to Basics” investment strategy. As part of the strategy, Magaziner has moved more than $500 million out of hedge funds and into more traditional investments.

“I am committed to bringing growth and stability to our State’s pension fund,” said Magaziner. “Our Back to Basics approach is improving investment returns through common sense investments and providing financial security for those who have dedicated their careers to public service.”


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