Diversified Portfolio Helps CalPERS

February 21, 2001 (PLANSPONSOR.com) - Real estate and alternative investments were credited with offsetting equity losses at the nation's largest pension fund, the California Public Employees' Retirement System (CalPERS). For the period ending December 31, 2000, the $165 billion fund posted a 1.38% loss.

Fund officials said the loss was “far better than expected” due to the fund’s diversified portfolio and “strong performance ‘ in real estate, bonds, and alternative investments. 

Despite the small loss,  fund assets gained 10.6% compounded over three years and 12.7% compounded over five years.  The fund reported that its five-year compounded equity returns remain 15.2% which exceeded the total equity benchmarks set at 14.8%.

CalPERS has approximately 59% of its investments in the public equity markets, which has been largely responsible for five straight years of double-digit overall returns.

“We knew we were in for an overdue stock market correction after an astonishing five year run of double-digit returns,”  Daniel Szente, chief investment officer, said. “We are glad that when the give-back came, it was minimal.”