Early Action Minimizes Subprime Mortgage Impact on CalSTRS Portfolio
CalSTRS has not been directly affected by the subprime mortgage crisis, which has roiled the world's
financial markets in recent weeks. Less than one-tenth of 1 percent of the total CalSTRS portfolio is in
this type of investment.
The CalSTRS staff is an experienced team of investment professionals who actively manage the portfolio
to the best advantage possible. They became concerned about the subprime mortgage industry about 18 months ago
and acted then to minimize the impact that this type of event would have on CalSTRS.
Strength in Diversity
The CalSTRS investment portfolio is strong and built to withstand any problems that arise in the
various investment vehicles.
The strength comes from being well diversified in a variety of investment vehicles, such as real estate
and international and U.S. stocks.
The portfolio is also strong because CalSTRS is a patient, long-term investor, which has proven to be the
best model for investment growth over time.
CalSTRS posted a 21.0 percent return on investments with $170.5 billion in assets as of June 30, 2007.
This fourth straight year of double-digit returns gives CalSTRS a 10-year average return of 9.0 percent,
exceeding the 8.0 percent average return needed to meet long-term benefit liabilities.
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