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Nevada doesn't gamble pension with this LBYM manager.
Old 10-23-2016, 01:50 PM   #1
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Nevada doesn't gamble pension with this LBYM manager.

What Does Nevada’s $35 Billion Fund Manager Do All Day? Nothing - WSJ

Nevada pension manager is an "outlier" for using indexes.

Says his returns are "competitive". I would've thought he'd be in top 10%,and the article would've said it if he was.

Despite all this, they're only 73% funded.

Just think if the whole industry did this. The economy would probably collapse from the unemployment and loss of spending of the $1mm+ "money managers". Lol.
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Old 10-23-2016, 07:34 PM   #2
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No details on what they are invested in nor the results, other than they have beat CALPERS which has drastically underperformed over the last 5 years. They dont even comment on the direction of the underfunding of the pensions. You can be in all indexes and still have no clue as to what that is with 15,000 index funds and still have a pension fund go belly up.

This is an indexers dream, claim victory without stating what it is you are doing just criticize anyone who doesnt do it your way.
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Old 10-23-2016, 07:53 PM   #3
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Quote:
Originally Posted by Running_Man View Post
No details on what they are invested in nor the results, other than they have beat CALPERS which has drastically underperformed over the last 5 years. They dont even comment on the direction of the underfunding of the pensions. You can be in all indexes and still have no clue as to what that is with 15,000 index funds and still have a pension fund go belly up.

This is an indexers dream, claim victory without stating what it is you are doing just criticize anyone who doesnt do it your way.
What are you talking about? I read the article and all it was about was this guy's investing strategy. It did say that other pension fund managers are doing more passive investing, but other than that is was just a puff article on one guy. I think you're a little sensitive. Maybe a nice massage or something will help you relax.
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Old 10-24-2016, 01:12 PM   #4
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Well Nevada has the highest contribution rate in the country for public workers, so I think actual results matter. So while investments may be passive, results must suck….

PERS costs, tied for highest nationwide, ignite member complaints >> Nevada Policy Research Institute

And in actuality the 73% funded is only conditional on an 8 percent annual return. In other words if the pension fund earned eight percent per year into eternity it would be 11 billion dollars short of being able to pay it’s obligations.

And as the attached article states Nevada has underperformed for 5 10 15 20 25 year periods. Which makes puff pieces on the opaque investment habits of their pension manager dangerous. A serious journalist would investigate the issues, and if indexing was indeed superior could talk about the strategy the pension manager was utilizing to meet retirement obligations for all of the retirees of Nevada. A serious journalist outlined these issues nicely in the attached article with real figures and mathematics.
PERS debt triples to $40B if consultant's buried report is correct >> Nevada Policy Research Institute

Well I did a little investigation:

And in actuality over the past year the actual return was 2.3 percent with the best results being hilariously funny the only non-passive investment of the fund with private real estate returning 8.7%. This is 10 percent of the total pension assets and without it actual return would have been 1.4% over the last year.
http://www.pionline.com/article/2016...elow-benchmark

And in what can only be a true passive money manager thought process they get to the 8 percent return by having the 10 percent in private real estate and private equity returning the largest percentage annually of any of their investments - expecting 10.7 percent return per year in the “non-passive” portion of the portfolio and about 6.9% for the “passive portion” of the portfolio. You can’t make this up. Oh and the US equity 42% of the portfolio is in the S&P500 (9% expected return), 18% of the portfolio is in MSCI EAFE index (9.5% expected return) and 33% bonds in US treasury index (3.5% expected return guess Nevada pension doesn’t expect negative rates). Or maybe they do and future capital gains are why they can expect a 3.5% return on bonds with under 2 percent yield.

https://www.nvpers.org/public/invest...t-Policies.pdf
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