New Jersey Pension Fund Returns Only 0.82% Year to Date

The investment portfolio for the state’s pension fund fell short of its benchmark by more than 2 percentage points.


The New Jersey Pension Fund’s investment portfolio lost 1.4% in September, bringing its total return for the first three quarters of the year to just 0.82%, well below its benchmark’s return of 2.83% over the same time period, while raising its total asset value to $78.35 billion.

For the fiscal year to date, the fund has returned 4.51%, just edging out its benchmark’s fiscal year-to-date return of 4.5%.

The fund underperformed over the one-, three-, and five-year time periods, returning 5.58%, 6.01%, and 7.64%, respectively, compared with its benchmark’s returns of 7.58%, 6.95%, and 8.49%, respectively, over the same time periods. 

But the fund outperformed over the past 10 and 20 years, returning 7.66% and 5.45%, respectively, compared with the benchmark’s returns of 7.44% and 5.35% over the past 10 and 20 years, respectively.

The top performing asset class for the pension fund during both the first three quarters of the year and the fiscal year to date was US equities, which returned 5.49% and 9.16%, respectively, but fell short of the equities benchmark, which returned 5.58% and 9.23%, respectively, during the same time periods.

However, US equities dragged the portfolio down during September, losing 3.71% for the month. The portfolio’s US equity holdings are heavily tilted toward tech stocks as its five largest holdings are in Apple, Microsoft, Amazon, Google parent Alphabet, and Facebook.

Non-US developed market equities and emerging market equities struggled in September, and are down 5.76% and 2.49%, respectively, for the first three quarters of the year. However, both are in positive territory for the fiscal year to date—up  5.41% and 9.67%, respectively.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

The worst performing asset class during the first nine months of the year has been real return, which is down 9.8% year to date, well below its benchmark performance, which is down only 3.4% during that time. It is also the worst performing asset class for the fiscal year to date, gaining only 0.63%, but still beating its benchmark, which is down 0.69% during the same time.

The fund’s target asset allocation is 59% in global growth, 18% in income, 13% in defensive, and 10% in real return.

Related Stories:

New Jersey Governor Proposes $4.6 Billion Pension Payment

New Jersey to Postpone Pension Payments

New Jersey Freezes Nearly $1 Billion in Spending Over COVID-19

Tags: , , ,

Climate Disclosure Rises Sharply for Canadian Financial Firms

Report shows firms north of the border are increasingly adopting TCFD-aligned climate-risk disclosures.


Canadian financial firms are increasingly disclosing their climate risks in alignment with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). According to a new report from the Global Risk Institute (GRI), there has been a 40% increase in the number of Canadian financial firms publicly disclosing their climate-related risk per the TCFD’s guidelines since 2017.

The study examined trends in climate-related financial disclosure among 58 financial firms in Canada, which includes banks, pensions, insurance firms, financial Crowns, and credit unions over the 2017, 2018, and 2019 reporting cycles. The Financial Stability Board introduced its recommendations for reporting in 2017, providing a framework for companies to disclose their material climate-related governance, strategy, management, and metrics and targets.

“Climate change-related risk is both a competitive issue and a regulatory issue—the landscape is changing dramatically and the Canadian financial sector must be ready,” Sonia Baxendale, president and CEO of GRI, said in statement. “As the world shifts to a low-carbon economy, there will be increasing expectations, and we need to ensure that Canada’s natural resource-based economy is an asset and not a liability.”

According the study, 44% of firms disclosing climate risk included TCFD-recommended information in annual reports, up from only 12% in 2017. It also found that nearly 80% of disclosing firms reported that they were assessing risk over the short, medium and long terms, and, among those, 70% disclosed the specific risks they were facing in each of the time horizons.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

The number of firms reporting that they have undertaken climate risk scenario analysis has more than tripled during the 2017 to 2019 time period, and 72% of firms disclosed that they undertook a materiality assessment for climate risk, up from 44% in 2017.

The report also outlines steps that can be taken by policymakers, companies, and investors to increase the quality and quantity of reporting, and to accelerate the road to adoption.

It said policymakers need to plainly articulate a road map for the adoption of the TCFD recommendations and outline what is expected and by when. They should also clarify what is mandatory and what is voluntary for both large companies and smaller ones.

The report also said company boards should increase their involvement in how climate risk is incorporated into corporate planning and discuss how climate risk and opportunities could impact future business plans. It also said firms should set and report on metrics and targets that are science-based and aligned with net-zero carbon emissions.

And for investors, the report said they should engage with senior executives and boards to encourage climate disclosure that is in alignment with TCFD recommendations and explain why and how the data is used. Additionally, the report suggests investors work with issuers to help increase understanding of climate risk and encourage commitment to emissions reductions and other actions toward carbon net-zero policies.

“I hope this report inspires those firms that have not yet taken steps to assess and report the financial implications of climate risk to get started, and those firms who are already solidly on the path to continuously push forward,” Baxendale wrote in the report. “In the end, facing climate change head on and taking action now is the right thing for future generations.”

Related Stories:

Institutional Investors Press CEOs to Disclose Climate Lobbying Practices

Group Urges US Financial Regulators to Act Now on Climate Change

Investor-Led Climate Action 100+ to Judge Companies on Sustainable Benchmark

Tags: , , , , , , ,

«