ERS Trust Fund Outperforms Benchmarks, Peers
During the first quarter of Calendar Year 2023 (CY23), the retirement fund investments of the ERS Trust gained 3.21% on a net of fees basis and outperformed the policy benchmark by 0.10%.
As of March 31, 2023, these investments were valued at $33.9 billion, up from $33.2 billion at the end of the fourth quarter of calendar year 2022. Gains in market value of 7.1% in Public Equity, 3.5% in Public Credit, and 2.3% in Rates drove much of the increase in value.
Total Fund Value: $33.9 Billion | |||
|---|---|---|---|
| First Quarter 2023 (1/1/23 – 3/31/23) | Calendar Year 2023 to date (1/1/23 – 3/31/23) | Fiscal Year 2023 to date (9/1/22 – 3/31/23) | |
| Gross Return | 3.22 % | 3.22 % | 2.96 % |
| Net Return | 3.21 % | 3.21 % | 2.94 % |
| Policy Benchmark | 3.11 % | 3.11 % | 2.83 % |
Net cash flow for the fund totaled $340 million in outflows during the quarter, bringing total net cash outflows for Fiscal Year 2023 to $879 million due in part to the receipt of a partial legacy payment in September. On a trailing one-year basis, total outflows were $1.53 billion—which represents 4.3% of the beginning value of the fund during that period.
All of the asset classes were within the diversification ranges stipulated by the Investment Policy Statement (IPS), including private equity at 18.8% of the fund compared to a 21% tactical maximum. Cash represented 2.4% of the total at quarter end, which reflected positioning of the Trust by staff to preserve capital and provide ample liquidity amid a turbulent market environment.
This prudent approach to investing has served ERS and its beneficiaries well. As shown in the table below, the long-term performance of the retirement fund remains strong. Such strong returns represent the equivalent of roughly $3 billion of value added to the fund over the last ten years, a significant contribution to the funding level of the plans it supports.
Performance Indicator | 3 Years | 5 Years | 10 Years |
|---|---|---|---|
Absolute Returns Net of Fees | 12.90 % | 7.75 % | 7.80 % |
Relative to Current Assumed 7% Rate of Return | +5.90 % | +0.75 % | +0.80 % |
Relative to ERS Policy Benchmark | +2.69 % | +1.42 % | +0.94 % |
Relative to ERS Passive Index | +0.61 % | +1.78 % | +0.85 % |
Relative to Median Peer Fund | +1.64 % | +1.70 % | +0.89% |
Learn more about the first quarter investment performance by viewing video and/or slides from the May 2023 ERS joint Board of Trustees and Investment Advisory Committee Meeting. For more information on how a prudent, diversified and long-term approach to investing helps ERS provide for reliable retirement benefits now and into the future, please visit the ERS Investments Performance page.