Liquid Alternatives: Rhode Island Pension Gains from Liquid Alts; Adds Wilshire Veteran Andrew Junkin
The Rhode Island Pension has outperformed most of its peers in the first quarter of 2020.
The Rhode Island pension system beat the median U.S. public pension plan by 4.2% during the first quarter of 2020, according to data from Investment Metrics. That ranked the fund 28th among the 546 public pension funds across the country. Even during the coronavirus mayhem in the markets, the Rhode Island pension fell 9.6% compared to the decline of 13.8% of the median pension plan.
Crisis Protection Class
A lot of the credit for the outperformance of the fund goes to a decision in September 2016 to invest using a Back-to-Basics approach. (Institutional Investor)
That included investments in a “Crisis Protection Class.” These were investments in liquid alternatives and other assets such as long-term treasuries and trend-following and managed futures strategies. These investments were selected to protect the pension against market risks and volatility and expected to strategically outperform during market crises.
Over 12-months ended May, these investments posted a return of 15.7%.
That helped the fund return a 6.6% net of fees, beating its benchmark return of 5.6% for the same period.
Over calendar 2019, Rhode Island returned 16.65% net of fees, beating its own benchmark of 15%.
Veteran Andrew Junkin now steering Rhode Island
Meanwhile, Andrew Junkin has taken charge of the Rhode Island Investment Office with effect from June 22. He takes over from Alec Stais, who left to join Providence Health & Services.
Junkin is a veteran in the investing arena, having spent 15 years at Wilshire Associates, before his departure in March.
His expertise in liquid alternatives should be very useful at the Rhode Island pension systems during the current period of market volatility and economic uncertainty.
The Wilshire Liquid Alternative Index, which provides a representative baseline for how the broad liquid alternative investment category performs, returned 1.54% in May, outperforming the 1.44% monthly return of the HFRX Global Hedge Fund Index.
Related Story: Wilshire Liquid Index Returns 1.54% in May
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