Total Fund Investment Returns
As of September 30, 2020
The Board has established a long-term objective to achieve a total investment return of at least 7.5% per year and a real rate of return of at least 5.25% per year. The real rate of return is the rate by which the long-term total return exceeds the inflation rate. The Systems' long-term investment objective of 7.5% was lowered from 7.6% at the October 2018 Board of Trustees meeting effective for July 1, 2018. The reduction in the long-term objective is based on capital market expectations and the belief that expected investment returns going forward will be lower than historical returns.
The Systems’ earned an investment return of 8.5% for the one year period ended September 30, 2020. The total plan return underperformed the policy benchmark return but exceeded the Systems’ long-term investment objective as a result of the strong rally in equity markets over the past six months.
The Systems’ annualized return for the 1-, 5-, 7-, and 10-year time periods have all have exceeded both the policy benchmark and the long-term investment objective. Additionally, over long periods of time, PSRS and PEERS continue to produce investment returns that meet or exceed the Systems' objective. The annualized investment return over the last 30 years is 8.4%.
* Effective July 1, 2013 all assets are held in the Missouri Education Pension Trust (MEPT) for the exclusive benefit of the Public School and Education Employee Retirement Systems of Missouri.
** The Policy Benchmark is comprised of 37.5% Russell 3000 Index, 20.0% Bloomberg Barclays U.S. Treasury, 19.5% MSCI ACWI ex-USA Index, 12.0% Bloomberg Barclays U.S. Intermediate Credit Index, 9.0% NCREIF Open End Diversified Core Equity Index, and 2.0% ICE BofAML U.S. High Yield Master II Index.
*** The Retirement Systems’ 2021 Fiscal Year began on July 1, 2020.