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2011 Investment Update

In 2011, TMRS continued implementing the following strategic target allocations which were adopted by the Board in June 2009, with implementation to occur over a multi-year period (see pie charts.)

There were several initiatives during 2011 aimed at continuing our progress toward the target allocations, including monthly commitments to U.S. and international equity index funds.  By the end of 2011, the equity target allocations were met with 40% of the fund invested in passively managed equity index funds (20% in domestic equities and 20% in international equities). TMRS began funding its real estate target allocation by committing $200 million to real estate limited partnerships and funding $97 million.  With the assistance of TMRS’ real estate consultant, ORG, TMRS will continue to seek out and fund additional real estate investments over the next few years in order to meet its 10% target.  In addition, TMRS funded its 5% target allocation to the real return asset class through investment in global inflation-linked bonds.  Assets allocated to fixed income managers totaled 54.2% and will gradually move to the 35% target allocation as fixed income funds other asset classes. 

The Board will continue to authorize implementation to the strategic target allocations in stages. To ensure that the risk tolerance remains appropriate, the target allocations will be reviewed at least annually for reasonableness relative to significant economic and market changes or changes to the Board’s long-term goals and objectives.

2011 Returns

The overall one-year rate of return on the $18.5 billion investment portfolio was 2.41% with fixed income the best performing asset class, earning 7.99%, while the return on equities was 1.03% domestic and -13.35% international.