Rhode Island pension fund beats target and benchmarks

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Rhode Island’s $8.3 billion pension fund finished its fiscal year ahead of its investment target and benchmarks, state Treasurer Seth Magaziner announced.

The fund, he said, returned 8.03% in the fiscal year ending June 30, ahead of its 7% annual target and ahead of its own benchmark, which returned 7.59% over the same period.

The fund also outperformed a traditional 60% stock-40% bond portfolio, which would have earned just 6.25%.

Since taking office in January 2015, the fund earned more than $1.67 billion from its investments, $1.24 billion of which has been earned since the state pension board adopted Magaziner's “back to basics” investment strategy in September 2016.

The strategy included exiting most hedge funds in favor of more traditional strategies for growth and stability. Over the past 12 months, investments in private equity returned 17.9% and global index funds earned 11.5% net of fees and expenses.

“We have taken our investment strategy back to basics for our members, who count on us for a secure retirement, and for all taxpayers, who deserve responsible financial management from their elected officials,” Magaziner said.

All performance figures are net of fees and expenses.

Fitch Ratings and S&P Global Ratings rate Rhode Island’s general obligation bonds AA. Moody’s Investors Service rates them an equivalent Aa2.

All three assign stable outlooks.

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Public pensions Budgets Seth Magaziner State of Rhode Island Rhode Island