To realize the asset allocations set forth in the Connecticut Retirement Plans and Trust Funds’ (CRPTF) Investment Policy Statement, the Treasurer administers Combined Investment Funds (“CIF”) as a series of mutual funds in which the CRPTF may invest through the purchase of ownership interests. The asset mix for the CRPTF is established by the Treasurer, with approval of the independent Investment Advisory Council (IAC), based on (1) capital market theory, (2) financial and fiduciary requirements, and (3) liquidity needs. A broad array of asset classes is considered for inclusion in a potential asset allocation structure. Each asset class has its own distinct characteristics, as well as expectations for long-term return and risk behavior.
The Connecticut Retirement Plans and Trust Funds has 11 active Combined Investment Funds. You will find descriptions of each Fund below.
Mutual Equity Fund
The Mutual Equity Fund (“MEF”) invests primarily in the common stocks of U.S. corporations. Investments may include any market capitalization or investment style. The Performance Benchmark for the MEF is the Russell 3000 Index.
Emerging Markets International Stock Fund
The Emerging Markets International Stock Fund (“EMISF”) invests primarily in the common stocks of non-U.S. corporations. Non-U.S. equities are defined as common stocks issued by companies domiciled outside the U.S. The Performance Benchmark for the EMISF is the Morgan Stanley Capital International Emerging Markets Investable Market Index (MSCI EM IMI) with net dividends reinvested.
Developed Markets International Stock Fund
The Development Markets International Stock Fund (“DMISF”) invests primarily in the common stocks of non-U.S. corporations and may include investments in any market capitalization or investment style. The Performance Benchmark for the DMISF is the Morgan Stanley Capital International Europe Australasia and Far East Investable Market Index (MSCI EAFE IMI) with net dividends reinvested.
Core Fixed Income Fund
Emerging Market Debt Fund
The Core Fixed Income Fund (“CFIF”) invests primarily in debt instruments issued by the U.S. Government and its agencies, “quasi-government” agencies, U.S. and international corporations, Euro bonds, high quality quasi or sovereign debt and any other public or private U.S. regulated debt securities. The Performance Benchmark for the CFIF is the Barclays Capital U.S. Aggregate Bond Index.
The Emerging Market Debt Fund (“EMDF”) consists of managed fixed income portfolios that invest in debt instruments issued by governments, quasi-government agencies and companies operating in developing countries as defined by the Fund benchmark and/or by The World Bank. The Performance Benchmark for the EMDF is the J.P. Morgan Emerging Markets Bonds Index Global Diversified/J.P. Morgan Government Bond Index-Emerging Markets Global Diversified (50%/50%).
High Yield Bond Fund
The High Yield Bond Fund (“HYBF”) consists of actively managed fixed income portfolios which, in aggregate, are debt instruments rated below investment grade by a nationally recognized rating agency service, such as Standard & Poor’s, Moody’s or Fitch. The Performance Benchmark for the HYBF is the Citigroup U.S. High Yield Market Capped Index.
Inflation Linked Bond Fund
The Inflation Linked Bond Fund (“ILBF”) invests in inflation-linked securities in global government bond markets. The Performance Benchmark for the ILBF is Barclays Capital World Government Inflation Linked Bond Index.
The objective of the Liquidity Fund (“LF”) is to provide a liquid source of funds to pay retirement benefits or trust beneficiaries. It is expected that the Fund will earn a return greater than that of money market investments. The benchmark for the LF is the one-month London Interbank Offered Rate (LIBOR).
Alternative Investment Fund
The Alternative Investment Fund (“AIF”) represents a unique investment style that differs from traditional funds by offering the potential to enhance return and/or reduce risk. The strategies employed within AIF represent a broad set of investment styles, mandates and products that focus primarily on the liquid equity, fixed income and derivatives markets, and may also include allocations to non-traditional investments, including illiquid securities and investments. Such strategies could include, but are not limited to, absolute return strategies, managed futures strategies, commodities, real assets and other alternative asset strategies. The Performance Benchmark for the AIF is the 90 Day Treasury Bill (90 Day T-Bill).
Real Estate Fund
The Real Estate Fund (“REF”) invests in real estate properties, real estate related equity investments, and real estate related debt and mortgages. The Fund consists of a number of externally managed investment strategies and invests across core, value add, opportunistic and publicly traded real estate securities. The Performance Benchmark for the REF is the National Council of Real Estate Investment Fiduciaries Property (NCREIF) Index.
Private Investment Fund
The Private Investment Fund (“PIF”) consists of a number of externally managed funds invested across venture capital and corporate finance private equity strategies. Venture Capital typically involves equity capital invested in young or development stage companies, whether start-up, early, mid or late stage companies. Corporate Finance typically involves equity and debt capital invested in growth, mature or distressed stage companies, often through the financing of acquisitions, spin-offs, mergers or changes in capitalization. The Performance Benchmark for the PIF is the S&P 500 plus 500 basis points Index.
For additional information about the investment policy of the Connecticut Retirement Plans and Trust Funds please consult the Investment Policy Statement.