Teachers’ Fund to Raise Stock Allocation

The $68.5-billion California State Teachers Retirement System plans to boost its stake in global stocks and may start investing in foreign bonds. The third-largest U.S. public pension fund raised its investment target to 38% of assets in U.S. stocks and 25% in foreign shares. It currently has 34% in U.S. shares and 20% overseas. Many large public pension funds are increasing their stakes in equities in a move to boost returns by taking advantage of strong global equity markets. Historically, stocks return about twice as much as bonds. It will probably take about three years to reach those targets, because the purchases will be made with cash coming into the fund and not from sales of other securities. Other funds are already at or near CalSTERS’ new targets. The $111-billion California Public Employees’ Retirement System has about 60% of assets in stocks.