CalPERS

Asset Allocation

The starting point and most important element of CalPERS successful return on investment is our asset allocation - our diversification among stocks, bonds, cash and other investments.

Asset allocation is not an asset-only or liability-only decision. All factors, including liabilities, benefit payments, operating expenses, and employer and member contributions are taken into account in determining the appropriate asset allocation mix. Our goal is to maximize returns at a prudent level of risk - an ever-changing balancing act between market volatility and long-term goals.

CalPERS follows a strategic asset allocation policy that identifies the percentage of funds to be invested in each asset class. Policy targets are typically implemented over a period of several years on market declines and through dollar cost averaging.

Listed below is CalPERS current asset allocation mix by market value and policy target percentages as of August 31, 2014.

Allocation & Market Value by Asset Class
Asset Class Current Allocation (%) Interim Strategic Target (%)1 Actual Investment ($ Billions)
Growth 63.7% 61.0% $192.0
Public Equity 53.3% 51.0% $160.6
Private Equity 10.4% 10.0% $31.4
Income 17.7% 19.0% $53.2
Real Assets 9.9% 12.0% $30.0
Real Estate 8.6% 10.0 $25.9
Forestland 0.8% 1.0% $2.3
Infrastructure 0.6% 1.0% $1.8
Liquidity 1.5% 2.0% $4.6
Inflation 5.5% 6.0% $16.5
Trust Level 2 1.7% N/A $5.0
Total Fund* 100.0% 100.0% $301.4

1 Interim strategic targets adopted by the Investment Committee at the May 2014 Investment Committee meeting
2 Trust Level includes: Absolute Return Strategy, Multi-Asset Class, and Overlay, Transition, and Plan Level.
* Figures are rounded for viewing purposes.

Dated: 10-29-2014