Hikes allocations to alternatives and US Treasuries to protect against a correction in stocks

The Teachers’ Retirement System (TRS) of Texas on Friday made changes to its asset allocation plan.

The changes underscore the $153 billion retirement plan’s worry that stock prices may be over-extended and could correct.

The TRS board adopted a two-pronged strategy to hedge against a downturn in equities.

Hikes to alternative investments

The first strategic change in allocations saw higher amounts earmarked for private equity (+1% to 14%), real estate (+1% to 15%) and energy, natural resources, and infrastructure (+1% to 6%).

More for US Treasuries and other assets

In the second strategic shift, US Treasuries and stable-value hedge funds will get a hike of 1% each to 6%. Risk parity strategies will be boosted to 8% from 5%.

The board also intends to borrow money if necessary to invest in the above assets.