US - The asset allocation of the US$250bn California Public Employees' Retirement System (CalPERS) has been revamped.
Two-thirds (66%) of the portfolio will be invested in public and private equities combined, while fixed income and inflation-linked assets combined will make up 24% of the overall portfolio and real estate 10%.
Global publicly-traded stocks have been reduced 4% to 56%, and will be split between US stocks and international stocks. Private equity has been increased 4% to 10%, to offset the decrease in publicly-traded equities.
The fixed income allocation has been decreased from 26% to 19%; while the new inflation linked assets will have a 5% allocation. The 10% real estate allocation is a 2% increase over the previous allocation of 8%.
Rob Feckner, board president, CalPERS, said: "We have achieved strong results for the last four years, but that is not a guarantee that we would be as successful with the existing allocation.
"This new asset allocation - with its emphasis on international stocks, venture capital, commodities, real estate and infrastructure - is the right mix to help us provide for our retirees and minimize the need for taxpayer dollars."
Historically, 75 cents of every dollar for CalPERS retirement benefits comes from investment earnings.
Charles Valdes, investment committee chair, CalPERS, said: "By hitting the reset button every few years, we keep our portfolio balanced and diversified in a fluid market that never stands still."
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On balance the asset class is well-positioned for 2019, according to Eaton Vance