Total Fund Investment Returns
As of December 31, 2017
The Board has established a long-term objective to achieve a total investment return of at least 7.6% per year and a real rate of return of at least 5.35% 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 7.6% was lowered from 7.75% at the November 2017 Board of Trustees meeting effective for July 1, 2017.
The Systems' earned an investment return of 14.9% for the one year period ended December 31, 2017. The total plan return exceeded both the policy benchmark of 14.0% and the long-term investment objective of 7.6% as a result of the recent strong rally in global equity markets.
The Systems' annualized return for the 1-, 5- and 7-year time periods have all exceeded the long-term investment objective while the 10-year time-frame is less than the long-term objective reflecting the lingering effects of the credit crisis and extreme market volatility beginning in 2008. However, 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 8.7%.
- *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 39.0% Russell 3000 Index, 16.5% MSCI ACWI ex-USA Index, 16.0% Barclays U.S. Treasury, 15.0% Barclays U.S. Intermediate Credit Index, 7.5% NCREIF Open End Diversified Core Equity Index, 4.0% Barclays U.S. TIPS 1-10 Year Index, and 2.0% Merrill Lynch High Yield Master II Index.
- ***The Retirement Systems' 2018 Fiscal Year began on July 1, 2017.