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How CalPERS Views Fiscal Year Returns

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An explanation of CalPERS fiscal year returns

While many of us plan our personal lives around the calendar year, when it comes to finance the fiscal year is king.

Unlike the calendar year, the fiscal year begins July 1 and closes June 30. Most government agencies look at the fiscal year to sum up how they did for the previous 12 months and to set their budgets and projections for the upcoming 12 months, and beyond.

CalPERS operates the same way. We announce our fiscal year returns in July, just a few weeks after the June 30 close date.

CalPERS is a long-term investor, so our annual returns are a temperature check on the health of our fund. They are a strong reflection of how the fund performed under current market conditions. But they tell only part of the story.

Because we pay pension benefits over decades, we look at our 5-, 10-, and 20-year returns to give us the best sense of how our portfolio is performing over the long term. To see the most recent returns for all these time periods, visit our most current Trust Level Quarterly Update- Performance & Risk report (PDF).

The novel coronavirus COVID-19 has had dramatic impacts globally, including to investors big and small across all asset classes. Our investment team has kept a close eye on the market volatility over the past few months and implemented measures to help the fund during these challenging times. Those measures helped us offset over $11 billion in losses during the recent market downturn.

While we won’t know the exact fiscal year returns for awhile, we continue to stay focused on our long-term investment plan. Just as we do not celebrate strong one-year returns, we also look at the data that comes out of lower fiscal years’ returns and use it to our advantage.

Market downturns do mean lower returns, but they also create opportunities for well positioned long-term investors like CalPERS. Because of careful preparation, we have the financial strength to capitalize on investment opportunities today that will benefit the CalPERS fund in years to come.