Many happy returns: How have PSPRS' investments performed over the last year?

The following table shows the monthly rates of return and fiscal year to date returns on PSPRS' investment portfolio as well as the monthly and fiscal year to date returns of the S&P 500.  The PSPRS totals are gross of fees, meaning they are the returns before investment fees are paid.  PSPRS' monthly reports do not always show a return net of fees, but for comparison, the 2013 fiscal year end total net of fees on 6/30/2013 was half a percent lower at 10.98%.  PSPRS' investment reports only go back to 12/31/2012.  They also lag about one month behind, so the report for February 2014 is the latest available.

	PSPRS	PSPRS	S&P 500	S&P 500
Report Date	Month End	Fiscal YTD	Month End	Fiscal YTD
7/31/2012	?	?	1.26%	1.26%
8/31/2012	?	?	1.98%	3.26%
9/30/2012	?	?	2.42%	5.76%
10/31/2012	?	?	-1.98%	3.67%
11/30/2012	?	?	0.28%	3.96%
12/31/2012	1.27%	6.01%	0.71%	4.70%
1/31/2013	1.92%	8.04%	5.04%	9.98%
2/28/2013	0.26%	8.33%	1.11%	11.20%
3/31/2013	2.04%	10.54%	3.60%	15.20%
4/30/2013	1.14%	11.80%	1.81%	17.28%
5/31/2013	0.53%	12.40%	2.08%	19.72%
6/30/2013	-0.82%	11.48%	-1.50%	17.93%
7/31/2013	1.94%	1.94%	4.95%	4.95%
8/30/2013	-0.04%	1.90%	-3.13%	1.67%
9/30/2013	1.98%	3.92%	2.97%	4.68%
10/31/2013	2.43%	6.44%	4.46%	9.35%
11/30/2013	0.54%	7.02%	2.80%	12.42%
12/31/2013	0.64%	7.70%	2.36%	15.07%
1/31/2014	-1.09%	6.53%	-3.56%	10.97%
2/28/2014	2.43%	9.11%	4.31%	15.75%
3/31/2014	?	?	0.69%	16.55%

I included the monthly returns of the S&P 500 as a simple benchmark to compare against PSPRS' returns.  This does not give a complete picture of PSPRS' performance since their investment strategy is much more diverse and complicated, and each investment class in which PSPRS invests has its own benchmark.  However, the S&P 500 is a familiar performance measure that can give some idea of how PSPRS is doing.  If you would like to see the more complete picture of PSPRS' investments, you can view PSPRS' monthly Board of Trustees' meeting materials here.

While this represents only 15 months of PSPRS' returns, it can be seen that PSPRS' investment strategy seems to be working as planned.  While PSPRS lagged the S&P 500 by about 6.5% at the end of last fiscal year and as of the current fiscal year-to-date, PSPRS still had very good returns of 11.48% and 9.11% at the end of those respective periods.  More importantly, in the three months when the S&P 500 had a loss, PSPRS was able to limit its own losses.  PSPRS suffered a 0.82% loss versus a 1.50% loss for the S&P 500 in June 2013: PSPRS essentially broke even  while the S&P 500 lost 3.13% in August 2013, and PSPRS lost 1.09% in February January 2014 while the S&P 500 lost 3.56%.

Although the temptation is to focus on what PSPRS did not earn in comparison to the S&P 500, it is more important to remember that 11.48% or 9.11% are excellent returns that I think most anyone would be happy with in their personal retirement account.  Combine this with a defensive element that so far appears to be ameliorating losses and this appears to be a good long-term strategy.  Of course, it needs to be emphasized that this is both an over-simplification of a complex investment strategy with a limited amount of data to compare, but this is still very promising.