Stocks and bonds have continued to rally during the first half of 2021, and funds are benefitting enormously. A Global SWF-built balance portfolio with two thirds in public markets and a third in private markets would have yielded 35% from April 1, 2020, to March 31, 2021, and 25% from July 1, 2020, to June 30, 2021. This compares to a what-we-thought-was-already-impressive 7.7% in calendar 2020.
Last Friday, GIC reported its best results in a long time, with rolling returns improving significantly and implying an annual yield for FY21 of 37.5%. Yesterday it was BCI who reported a 16.5% (FY ending on March 31) and CalSTRS who announced a record of 27.2% (FY ending on June 30). The Sacramento-based investor continues to outperform its stalemate CalPERS and has doubled its AuM since 2011.
The way funds build their benchmarks varies significantly, and their asset allocation and risk profile is also very heterogenous, so comparisons must always be taken with a grain of salt, but below is the chart with the performances for FY21 so far. We should have in the results of other funds closing the year in June, including Alaska PFC, Future Fund and NZ Super, very soon too.
The obvious effect of these investment returns is the unparalleled growth in assets under management (AuM). Global SWF estimates that GIC’s AuM has grown to US$ 744 billion, and Pension Funds are being able to improve their funding ratios significantly, too. According to our Global Track, the industry AuM will soon pass US$ 10 trillion (for SWFs) and US$ 20 trillion (for PPFs), for a combined AuM of US$ 30 trillion.