State & Local Government Policy, Business and Technology

State and Local Pension Plans Shift Toward 'Alternative' Investments

Route Fifty: State and local government pension systems have over the last decade shifted a greater share of their portfolios toward investments like hedge funds, commodities and real estate.

These types “alternative” assets are generally considered riskier and more difficult to convert quickly into cash than more traditional investments like stocks and bonds. But this added risk and reduced flexibility can result in higher investment returns.

Earlier this month, the Center for Retirement Research at Boston College released a brief that looks at what types of state and local public pension plans have moved the most toward alternative investments and how such shifts affect investment returns and volatility.

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