NY State Pension Returns 3.38% in Q2

$216.2 billion retirement system also names Anastasia Titarchuk CIO.

The New York State Common Retirement Fund’s investment portfolio returned 3.38% for the first quarter of its fiscal year ending June 30, which raised its estimated value to $216.2 billion.

“The fund is off to a strong start this fiscal year,” New York State Comptroller Thomas DiNapoli said in a statement. “Markets have been volatile, however, warranting caution from investors. Longer term, we continue to take a conservative approach and closely examine our 7% target rate of return to determine if it is due for an adjustment as a matter of prudent fiscal management.”

As of June 30, the fund had 38.6% of its assets invested in publicly traded domestic equities, 24.8% in cash, bonds, and mortgages, 15.3% in international public equities, 9.2% in private equity, 8.5% in real estate and real assets, and 3.6% in absolute return strategies and opportunistic alternatives.

The fund paid out an estimated $2.89 billion in benefits during the quarter.  According to Pew Charitable Trusts, New York is one of only eight states whose state pension funds have a funded level of at least 90%.

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DiNapoli also named interim CIO Anastasia Titarchuk as its permanent CIO. She has been the retirement system’s interim CIO since July 2018, when former CIO Vicki Fuller announced she was retiring.

“Anastasia Titarchuk’s leadership and talents as a skilled investor are reflected in the success of our state’s pension fund,” DiNapoli said. “She joined the state pension fund eight years ago and earned a reputation for delivering results, making her an outstanding candidate for CIO.”

Titarchuk was born in Moscow and moved to the US as a teenager. She graduated from Yale University with a B.S. in applied mathematics. Over the course of two decades, she worked in a variety of roles on Wall Street, including JP Morgan Chase, Barclays Capital/Lehman Brothers, and Bank of America.

“I am grateful for the trust Comptroller DiNapoli has placed in me over the years,” Titarchuk said in a statement. “Working with the fund’s staff has been a wonderful and enjoyable experience, and I’m excited to continue our partnership and grow the fund’s value in the months and years to come.”

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US Pensions Return 6.47% for Fiscal 2019, Miss Target

Market volatility, active management worked against all plan types.

Institutional assets tracked by Wilshire Trust Universe Comparison Service saw all-plan median returns of 3.21% and 6.47% for the second quarter and fiscal year ending June 28, respectively, according to investment management firm Wilshire. 

The returns build on the first quarter’s returns of 8.26%, which was the largest quarterly gain since the third quarter of 2009. However, the 6.47% was short of the 7.25% long-term median target set by public pension plans, according to Wilshire Associates.

“For the one year ending in June of 2019, market volatility and active management worked against all plan types,” Jason Schwarz, president of Wilshire Analytics and Wilshire Funds Management, said in a statement.

“Changes in investor and economic sentiment over the past year resulted in unforeseen outcomes for many active managers,” Schwarz said, adding that “in general, deviations from benchmark exposure were challenged, particularly in fixed income, as yields tumbled and pushed the price of US Treasuries materially higher.”

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US equities, as represented by the Wilshire 5000 Total Market Index, rose 3.99% for the quarter and 9.09% for the year, while international equities, as measured by the MSCI AC World ex US, gained 2.98% for the quarter and 1.29% for the year. US bonds, represented by the Wilshire Bond Index, gained 3.57% and 9.19%, respectively, for the second quarter and for the year, and multi-asset, represented by the Wilshire Risk Parity – 10% Target Volatility Index, rose 6.20% for the quarter and 12.52% for the year.

Wilshire also said that one-year medians ranged from 5.45% to 8.41% for large foundations and endowments with assets above $500 million to corporate plans with assets above $1 billion, respectively.

For the fiscal year ending June 2019, all plan types underperformed the 60/40 portfolio, which rose 9.13%. Large plans outperformed small for the year across all types except for foundations and endowments due to their greater equity exposure.

Large plans with assets above $1 billion gained 3.27% and 6.92% for the quarter and year ending June 30, respectively, while plans with assets of less than $1 billion underperformed large for both the quarter and year with returns of 3.16% and 6.30%, respectively.

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