The Rhode Island pension fund finished well ahead of U.S. and global stock markets in August due to the defensively positioned investments in the fund's portfolio.
In a month when the U.S. stock market, as measured by the Russell 3000 Index, fell by -2.0%, and international markets returned -2.4% according to the MSCI All Countries World Net Index, the state's pension fund returned 0.2%.
While most of the Rhode Island pension fund is invested in traditional strategies for growth, nearly 40% of the fund is invested in defensive assets like low-risk bonds and cash to provide protection from swings in the stock market.
The pension's August returns were led by the fund's defensive assets including U.S. Treasuries, which returned 10.6% and by systematic trend-following strategies, which returned 8.5%.
The diversified investment strategy also served Rhode Island well across the 2019 calendar year thus far. Since January, the fund has returned 10.9%, well ahead of its benchmark return of 9.8%.
Detailed information about the fund, including the 'Back to Basics' investment strategy, performance, and detailed information about its managers are published online as part of Treasurer Magaziner's "Transparent Treasury" initiative at investments.treasury.ri.gov.
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