(Bloomberg) -- The California State Teachers’ Retirement System gained 6.8% in the latest fiscal year, a sharp decline from the previous period and just short of its annual target.
The second-largest U.S. pension fund posted gains of 5.3% in stocks, 10.5% in private equity and 8.1% in fixed income, according to a statement Tuesday. The S&P 500 Index returned 10.4% in the 12 months through June.
Pension investments suffered from high volatility last year, especially for stocks, which made up more than half of Calstrs’ $236.9 billion in assets as of June 30. Calstrs had earned 9% in fiscal 2018.
“It was a roller-coaster year and a very challenging environment in which to generate returns,” Chief Investment Officer Christopher J. Ailman said in the statement.
Private equity continued to be the best-performing category. The pension system’s five-year average annual return fell to 6.9%, while the 10-year number climbed to 10.1% as losses from the 2008 market crash were no longer a factor.
| Asset Class | 1-Year Return | 5-Year Return | Allocation |
|---|---|---|---|
| Public Equity | 5.3% | 7.2% | 50.5% |
| Private Equity | 10.5 | 10.6 | 9.2 |
| Real Estate | 8.2 | 9.9 | 13.7 |
| Inflation Sensitive | 6 | 4.5 | 2.5 |
| Risk Mitigating | 8.3 | 1.4 | 9.4 |
| Fixed Income | 8.1 | 3.4 | 12.3 |
| Total Fund | 6.8 | 6.9 | 100 |
Source: Calstrs
Note: Asset classes not shown include cash, strategic overlay and innovative strategies.
The biggest U.S. pension, the California Public Employees’ Retirement System, earned 6.7% on its investments in the fiscal year through June.
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