image showing SWIB Core Fund asset allocation targets

The State of Wisconsin Investment Board implements a prudent and innovative long-term investment strategy to manage the assets of the Wisconsin Retirement System trust funds. SWIB’s portfolio of investments for the Core Trust Fund is highly diversified, carefully monitored, and designed to strike an appropriate balance between risk and return.

A highly diversified fund means SWIB invests in a number of different asset classes. Diversification helps to stabilize the effects of market changes and help meet the long-term needs of the WRS. The Core Fund is invested in domestic and global markets in stocks, fixed income, real estate , private equity, multi-asset, and inflation sensitive portfolios.

In October, investment staff and SWIB’s asset allocation consultant conducted an asset allocation review. The review included an in-depth look at the current market and economic environment and themes, as well as developing trends that might impact SWIB’s investment decisions in the future. Developing the Core Fund’s asset allocation focuses on what is referred to as a “Goldilocks Zone".  This is an allocation that is neither “too hot” nor “too cold” in terms of risk and expected returns. The review resulted in the decision to maintain the current Core Fund asset allocation.

“Going forward, we see a tightening monetary policy, which means it will become more challenging to make money,” SWIB Executive Director/Chief Investment Officer David Villa said. “Over the past several years, SWIB has put in place a robust investment strategy that is designed to provide the trust funds with moderate protection from another dramatic downturn while still earning reasonable returns. We believe this is the best strategy moving forward.”

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