Investments - Asset Allocation

As of September 30, 2019, the Pennsylvania Municipal Retirement System's investment portfolio had a market value of $2.61 billion - a decrease of $30 million relative to the June 30, 2019 ending value of $2.64 billion. The Pennsylvania Municipal Retirement Board has contracts with fourteen professional money management firms. These relationships allow the Board to invest the System's assets in a diversified portfolio composed of stocks, bonds, and real estate. The objective is to benefit member municipalities by adding value through prudent asset allocation. The present asset allocation targets are:

Equities: (65%)   Domestic large capitalized firms 25% Domestic small capitalized firms 15% International developed markets 15% International emerging markets 10% Fixed Income (15%)   Real Estate (20%)   Core 12.5% Timber 7.5%

Large capitalized domestic stocks are securities issued by companies whose total market values generally exceed $1 billion. Capitalization is determined by multiplying the number of outstanding shares by the market value of each share. Those companies are generally well-known by consumers and investors. Small capitalized domestic firms are typically less well-known companies with generally more growth potential. The international stocks from developed countries represent the securities of hundreds of corporations located in approximately 25 different countries other than the United States of America. The international stocks from emerging markets represent the securities of companies located in countries that are in their relative infancy in terms of regulations and reporting requirements. The most often cited countries defining these markets are Brazil, Russia, India, and China.

The actual asset allocation may fluctuate up to 2%, plus or minus, from the target due to market activity before the System's staff rebalances the investment portfolio. The total percentage of the portfolio held by each manager, as of September 30, 2019, is as follows:

Investment Manager Asset Class Percentage of portfolio AMI Asset Management Stock 1.3% Copeland Capital Management Stock 1.7% Eagle Capital Management Stock 5.6% Emerald Advisers Stock 2.4% Federated Investors Stock 3.9% Forest Investment Associates Real Estate 5.2% Hardman Johnston Global Advisors Stock 4.3% HGK Asset Management Stock 4.6% LSV Asset Management Stock 8.9% Polen Capital Management Stock 8.7% Prudential Financial Real Estate 6.0% Smith, Graham & Co. Stock 2.7% State Street Global Advisors Fixed Income & Stock 36.4% Nuveen Real Estate Real Estate 8.1% Unallocated Cash Cash 0.2% 100.00%*

*May not equal 100% due to rounding.
More information about the managers can be found at their website by selecting the name of the company above.