Because I am a retired state teacher in the state of Ohio, I receive the annual report. This years annual report led with this headline:
STRS Ohio Posts +13.7% Total Fund Return in Fiscal 2013
STRS Ohio’s total fund return was +13.7% for the year ending June 30, 2013. The market value of investment assets as of June 30 was $68.0 billion. The strong return for fiscal 2013 well exceeded the fund’s assumed actuarial return of 7.75%, but trailed the total fund benchmark return.
BUT…Dow Did Better
Please note the little green figure in the lower right hand corner of the chart. It shows a return of 16.26% for DIA for the same “fiscal” period of June 29, 2012 to July 1, 2013.
In 2007 STRS published the composition of their portfolio.
- 40% Domestic Stocks
- 25% International Stocks
- 8% Real Estate
- 19% Fixed Income (bonds)
- 3.5% Private Equity
- 4% Cash
I think it is safe to say that the 2013 portfolio was similarly diversified.
Another Benchmark Comparison
In their July, 2016 NEWS bulletin sent to every retiree, STRS announced that they had a five year total net return of 10.5%. I presume that means a compound annual return of 10.5%. You can see their statement by clicking HERE.
VTI had a compound annual return of 10% over the same 5 year period. Think about it. With zero effort you could have effectively duplicated the results achieved by professional portfolio managers who are in the top 25% of their peers. Their results were achieved by a team of 10 professionals working 40 hours a week, 50 weeks a year to do no better than you can do by investing in only VTI.
Return To “Diversified Portfolios Examined”
Return To “Why No Diversification”
Return To “Evidence Based Proof of Plan“