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Investment reports demonstrate fund's resilience, long-term success

Plant growing from a pile of coins

CalSTRS released its latest semi-annual performance reports to the Teachers’ Retirement Board’s Investment Committee at the September 2023 meeting. These reports—Executive Summary (a summary of each asset class), Real Estate Strategy and Private Equity Performance—aid the Investment Committee in overseeing the Teachers’ Retirement Fund. The reports reflect the six-month period between January 1, 2023, and June 30, 2023.

The reports allow the board to monitor the investment performance for the fiscal year 2022–23 and the 3-, 5- and 10-year results ending June 30, 2023.

Here are highlights from each report:

Executive Summary

The CalSTRS Investment Portfolio registered a 6.3% gain in the fiscal year ending June 30, 2023. It was the seventh time in the past eight fiscal years ending June 30 in which the fund showed an increased dollar amount. In the six months ending June 30, 2023, the value of CalSTRS' total portfolio rose by $13.5 billion (net of fees, contributions and benefits) to $315.6 billion.

Real Estate Strategy

The Real Estate Portfolio has outperformed both its target returns and inflation over the past decade. As of June 30, 2023, CalSTRS' Real Estate value was approximately $50 billion, which was 15.8% of the overall portfolio. Industrial property values remain strong.

Private Equity Performance

The Private Equity Portfolio increased over the past six months, following a decline through the first three quarters of 2022, and remains well diversified, reducing the amount of risk across the CalSTRS Investment Portfolio. While the Private Equity team faces challenges given current market conditions, there are opportunities available with lower-cost investments that help reduce fees. This is part of CalSTRS’ Collaborative Model investment strategy, which brings more investments in-house and leverages external partnerships to save money on behalf of California’s public educators.

Semi-annual reports are presented to the board at the March and September meetings.