Investment Strategy

At the heart of SCERS’ investment approach lies a guiding philosophy—one built on careful planning, thoughtful diversification, and disciplined oversight. SCERS’ Investment Strategy is rooted in the Master Investment Policy Statement (MIPS) and further detailed through asset-class-specific policy documents. Together, they set a clear path for how your retirement assets are invested to meet long-term retirement promises.

The Role of Strategic Asset Allocation

Investment Strategy starts with strategic asset allocation, which defines the targeted mix of major asset classes—such as public equities, fixed income, real estate, and alternatives—designed to align with SCERS’ long-term obligations. The objective is to capture favorable returns while managing volatility through wide-ranging diversification across geographies, sectors, and investment styles.

Selection of asset classes is based not just on expected returns, but also on their ability to enhance portfolio resilience—helping preserve assets during downturns and maximizing growth over time.

Asset-Class–Specific Policy Documents

To bring the strategy to life, SCERS uses investment policy documents tailored for each asset category. For example, the Growth Asset Category Investment Policy Statement outlines objectives, benchmarks, risk parameters, and permissible investment vehicles for assets like public equities, private equity,  and credit.These detailed policies specify:

  • Goals and returns expectations for each asset class.
  • Investment guidelines, including allocation targets and ranges across sub-strategies and geographies to avoid concentration of strategies and investment managers.
  • Allowed investments: from single-manager accounts to limited partnerships.
  • Liquidity constraints, recognizing that private investments may take years before capital is fully deployed or recoverable.
  • Performance benchmarking and evaluation, including risk-adjusted analysis.
  • The rebalancing process to align the portfolio with long-term targets even as markets shift.
  • Monitoring procedures to ensure alignment between investment performance, strategy, and operational integrity.

Getting Tactical with Overlay and Diversifying Programs

To manage portfolio drift and maintain exposure targets, SCERS employs an Overlay Program. This strategic tool helps equitize cash and rebalance asset exposures dynamically, ensuring the portfolio remains aligned with policy targets.

Risk Management and Oversight

Risk is consciously managed at every level:

  • Strategic asset allocation acts as the first line of defense.
  • Asset-class policies enforce discipline around diversification, liquidity, and fund selection.
  • The Overlay Program ensures allocations stay true even as market values change.
  • Staff and consultants monitor investment guidelines, perform due diligence, conduct site visits, and flag any deviations through transparent reporting.

Why This Matters to Members

You might not see the behind-the-scenes meetings, policies, or rebalancing activity—but their impact is felt in what matters most: whether your retirement assets are growing steadily and securely. SCERS’ Investment Strategy ensures that every decision—from the proportion invested in equities to oversight of private funds—serves the long-term promise of retirement benefits.

Through strategic frameworks, ongoing monitoring, and disciplined execution, SCERS safeguards the system’s resilience across market cycles, economic shifts, and demographic trends.