Investments
General Information | Professional Advisors | Archive
Information and contact form for investment managers
seeking to do business with TMRS
TMRS Investment Policy - February 2012 (pdf)
Investment Update as of March 31, 2012 (pdf)
Investment Update as of February 29, 2012 (pdf)
Investment Update as of December 31, 2011 (pdf)
Investment Update as of October 31, 2011 (pdf)
Quarterly Summary as of September 30, 2011 - 3Q 2011 (pdf)
Investment Update as of August 31, 2011 (pdf)
Investment Update as of June 30, 2011 (pdf)
Performance Report as of May 31, 2011 (pdf)
Quarterly Summary as of March 31, 2011 - 1Q 2011 (pdf)
Performance Report as of January 31, 2011 (pdf)
Quarterly Summary as of December 31, 2010 - 4Q 2010 (pdf)
TMRS investments are held in trust for the exclusive benefit of members and invested under the provisions of the TMRS Act. The investment statutory guidelines for TMRS are found in the Texas Government Code, Sections 855.301 through 855.303.
PRINCIPLES AND OBJECTIVES
TMRS investments are managed to ensure that members, retirees, and beneficiaries are provided with the benefits they have been promised by their employers at a reasonable and predictable cost to the employers. Assets will be invested for total return with appropriate consideration for portfolio volatility (risk) and liquidity. Emphasis should be on both capital appreciation as well as the production of income in order to satisfy the short-term and long-term funding needs of TMRS. Total return includes dividends, interest, and realized and unrealized capital appreciation.
Investments are made with the degree of judgment and care, under the circumstances that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, considering the probable income from the securities and probable safety of their capital and in consideration of the purposes, terms, distribution requirements and other circumstances of the TMRS fund. Investment and management decisions respecting individual assets will be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fund.
INVESTMENTS IN TRANSITION
As of December 31, 2008, the TMRS retirement fund was valued at $14.6 billion, invested predominantly in fixed income securities with a 12% allocation to equities. The initial move into equities, half in U.S. stocks and half in foreign stocks, was invested passively in index funds, a lower-cost approach. That allocation to equities, adopted by the Board of Trustees in November 2007, was a first step toward diversification of the portfolio, pending legislation that was subsequently adopted in 2009. The passage of HB 360 enables TMRS investments to be managed toward a total return objective.
How Is TMRS Diversifying Its Investments?
As of December 31, 2009, TMRS investments were allocated 23% to equities (11.6% domestic and 11.4% international) and 76.7% to fixed income.
As of March 31, 2010, the TMRS asset mix was 26.6% to equities (13.6% domestic and 13.0% international) and 73.4% to fixed income.
In June 2009, the Board adopted an Investment Policy that reflects the change from an income to a total return objective and approved a strategic asset allocation policy that fully diversifies the investment portfolio. The long-term asset allocation target is:
20% domestic equities
20% international equities
35% fixed income
10% real estate
5% absolute return
5% real return
5% private equity
TMRS continues to make a gradual, deliberate, and prudent transition from its current asset allocation, focused on managing risk while improving the potential for future returns.
INVESTMENT UPDATES
March 31, 2010 UPDATE
Investment performance for TMRS at March 31 was up 2.48% year-to-date due to positive performance in all asset classes that TMRS is invested in. The 1-year total return for the $16.74 billion fund was 16.42%*, with the strongest performance coming from equities. As of this date, the domestic equity allocation was $2.289 billion, and the international equity allocation was $2.170 billion, for a total of $4.459 billion (26.6%) in equities. The remaining $12.28 billion (73.4%) was invested in fixed-income securities. TMRS’ total portfolio performance is compared to a customized benchmark that reflects the performance of market indices representative of the asset classes TMRS is invested in, weighted according to the expected allocation between those asset classes for the period.
At its meeting in February, the Board’s investment consultant, R.V. Kuhns, presented a review of the accomplishments to date with an overview of the next steps for the investment program, focusing on 2010. The equity component has grown to more than half of the total 40% target and continues to be implemented through systematic monthly commitments to avoid market timing. The focal points for 2010 are real estate, real return, and diversification of the international equity allocation.
* versus TMRS’ custom benchmark performance of 14.30% and the median large public fund return of 32.9%, which benefitted during this period from a higher allocation, over 50%, to equities.