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Only CalPERS would be proud of an 0.61% gain in the past year. Their return was the same as a riskless investment in an ultrashort term bond fund. I'll bet the management fees were higher than the fund returns."I'm proud to report in the face of that volatility and turbulence the total fund was able to return a modest, positive return for the year," said Eliopoulos
Let's be clear here. Public, private - doesn't matter. It's not a matter of devious politicians. Private companies use the same hedge funds, private equity, and other costly black boxes, albeit in different mixes. While they tend to allocate less to alts than public pensions, they still invest significantly, and they allocate more to hedge funds than do public pensions.
Why not go the traditional pension route? Not only don't I trust state pension/investment boards (or their political masters)
[and]
More pathetic, the clowns running many of these funds/programs are suckered by the allure of hedge funds, private equity, and other costly black boxes that eat up their returns after expenses and fees ...
http://www.pionline.com/article/20160223/ONLINE/160229965/pension-funds-globally-increased-hedge-fund-allocations-in-2015-8212-surveyDeutsche Bank’s [December 2015] survey data [] showed that ... Public pension funds had a median 29% allocation to alternatives and 7% to hedge funds; private pension funds, 17% and 10%, respectively; and sovereign wealth funds, 13% and 5%.
Finally, consider that companies often raided their private pension plans to inflate their profits.The companies in the Standard & Poor’s 500 collectively reported that at the end of their most recent fiscal years, their pension plans had obligations of $1.68 trillion and assets of just $1.32 trillion. The difference of $355 billion was the largest ever, S.& P. said in a report.
Of the 500 companies, 338 have defined-benefit pension plans, and only 18 are fully funded. ...
The main cause of the underfunding at many companies does not appear to be a failure to make contributions to the plans. Instead, it reflects the fact that investment markets have not performed well for a sustained period.
...
Virtually all pension funds had assumed returns would be better, leaving them underfunded when their investments failed to perform as expected.
https://www.wmich.edu/hhs/newsletters_journals/jssw_institutional/individual_subscribers/39.4.Zurlo.pdfin the 1990s corporations used a variety of accounting techniques, tax incentives, and other forms of manipulation to syphon money from pension plans and serve corporate purposes. [E.E. Shultz] provides an example called the “accounting effect,” where a company could reduce benefits by hundreds of millions of dollars and record the change as a profit. This practice benefited corporate executives, who were compensated by reaching certain profit targets, and shareholders, but in many cases workers and retirees, subjected to this deception and fraud, were cheated out of retirement income.
http://www.mutualfundobserver.com/discuss/discussion/comment/74119/#Comment_74119PRLAX: over the past 5 years, still DOWN over -8%. If you bought into it in this past January, you're very happy!
ODPVY (Morningstar:) + 65% YTD.
Hi Mark...I believe the holdings were reduced, but only marginally. My original interest was in FAIRX, which holds similar stakes to also include a wider array of preferreds. To be clear, I sold out of my Fairholme position in December, mainly to avoid the distributions. On a flyer, I did buy quite a few shares of FNMA though in both taxable and deferred accounts at that same time.@Charles and Press - with FNMA at just 6-7% of the fund holdings how big of an impact are you expecting/anticipating from even a positive decision? Also didn't the fund have quite a larger percentage of assets in this holding at the start of this dispute? If so one might question why its been sold down. Just curious.
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