Rhode Island’s pension fund investments returned 1.51% in July, ahead of its benchmark’s return of 1.31%, and raising its total asset value by $125 million to more than $8.4 billion.
Rhode Island General Treasurer Seth Magaziner said the performance was driven by low-fee index fund investments in the global stock market.
The state’s pension fund returns have outpaced the benchmark over the past one-, three-, five-, and 10-year periods. For the 12-month period ending July 31, the fund returned 7.8%, compared to 7.2% for its benchmark, and 6.2% for a hypothetical fund comprised of 60% stocks and 40% bonds. And over the past three years, the fund has an annualized return of 6.68%, versus the benchmark return of 6.34%, and the 6.06% return earned by a 60/40 portfolio.
For the five-year period, the fund earned an annualized return of 6.95%, compared to the benchmark return of 6.71%, and a 60/40 fund, which had a 6.41% return. And over the past 10 years, the fund has returned 6.0% annually, compared to 5.8% for its benchmark, and 5.7% for a 60/40 fund.
The asset allocation for the fund is roughly 55.1% in growth, 37.1% in stability, and 7.5% in income. The growth asset class has approximately 25% in US equities, 16.7% in international developed equities, and 5.3% in emerging market equities. The income asset class is made up of liquid credit (4.3%), high-yield infrastructure (2.0%), and private credit (1.2%). And the stability asset class has 11.0% in investment-grade fixed income, 6.5% in absolute return, 5.1% in core real estate, 3.8% in long-duration Treasuries, 3.6% in systematic trend following, 3.0% in cash, 2.4% in Treasury inflation-protected securities, and 1.7% in private infrastructure.