R.I. pension fund loses $900M in Q1

RHODE ISLAND’S PENSION investment fund lost $900 million in the first quarter of 2020, two-thirds of which occurred in March. / COURTESY R.I. OFFICE OF THE GENERAL TREASURER

PROVIDENCE – The state pension fund lost nearly $900 million in the first quarter of 2020, with a $600 million hit in March alone amid sudden drops in the stock market, according to new online information published by the R.I. Office of the General Treasurer.

As of March 30, the fund stood at $7.9 billion in assets, compared with almost $8.8 billion at the start of the year and $8.5 billion as of Feb. 29. The monthly investment decline was 6.7%.

Still, the hit was not as bad as it could have been – which R.I. General Treasurer Seth Magaziner credited to the state’s Crisis Protection allocation. The crisis protection strategy, which includes long-duration U.S. Treasury Department bonds and “trend-following” assets that together comprise about 12.6% of all investments, was adopted in 2016 to protect against volatile markets, Magaziner said in a statement.

These investments returned 6.5% in March for a total portfolio decline of 6.7%, compared with the 8.3% loss the fund would have seen under the traditional 60-40 split between stocks and bonds, the release stated.

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In the last year, the crisis protection allocation has saved the pension fund $270 million otherwise lost if the money was invested in the S&P 500.

One-year returns have also outperformed state benchmarks, with a 1.3% loss as of March 30 compared with the 2.5% decline under the benchmark.

Nancy Lavin is a staff writer for PBN. Contact her at Lavin@pbn.com.

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