CalSTRs Chief Investment Officer Christopher Ailman says his team is keeping a close eye on actions by central banks globally. ‘For the first time you’ve got the U.S. Fed and maybe the Bank of England tightening. And then you have the European Central Bank and the Bank of Japan easing…that dynamic has an impact not just in the credit markets but in the equity markets.’ Ailman says that even if the Fed does begin to tighten, he says he can still continue to invest in the U.S. equity markets and ‘still be in good shape.’ CalSTRs, the world’s largest educator-only pension fund, has a portfolio valued at roughly $191 billion dollars. Ailman says that right now the portfolio is about 85-percent stocks and about 15-percent bonds. Ailman says that while most individual investors hold a 60-40 ratio of equities to bonds, CalSTRs has a 70-30 mix because people need growth. Right now, he’s steering clear of stocks in frontier markets, though he is making infrastructure investments in them. TheStreet’s Rhonda Schaffler has more from the Milken Global Conference in Los Angeles.
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