ISBI believes that meeting its actuarial return assumption of 8.5% is both desirable and realistic. The Board manages the assets of the General Assembly Retirement System, Judges' Retirement System, State Employees' Retirement System. ISBI strives to maximize investment returns in order to meet the long-term liabilities of the State Retirement Systems. To do so, the Board must achieve a fine balance between the goals of growing the assets of the Fund and keeping risk at a reasonable level. A key factor shaping the Board's attitude towards risk is the long-term investment horizon of the Fund. The long-term horizon enables the Fund to tolerate the risk of somewhat volatile investment returns in the short run with the expectation of higher returns in the long run.
The Board is cognizant of the fact that diversification is necessary to reduce unnecessary risk. Therefore, the Fund will be diversified across several asset classes, securities, and managers. Selected individual portfolios may be undiversified while maintaining the diversified nature of the total fund.
ISBI believes that it should be open to the use of both active and passive management. ISBI will consider passive management in areas where the Board concludes that the markets are highly efficient. Whenever appropriate ISBI will utilize index funds or enhanced index strategies to get broad asset class exposure at low cost.
Both separate and commingled accounts are acceptable investment vehicles.
ISBI believes that securities lending can generate incremental return while taking reasonable risk.
Please note that the numbers in the below attachments are preliminary and subject to change.
Asset Allocation [PDF, 82KB]
Executive Summary [pdf, 132KB]
 Documents are provided in PDF format, to view documents you will need Adobe's free Acrobat Reader.
|
