Fiscal Year 2020 Investment Plan Expects Moderate Growth in the Year Ahead
In its June report to the State Teachers Retirement Board, STRS Ohio staff presented its fiscal year 2020 Investment Plan. The plan details staff’s investment outlook and strategy for each asset class comprising the system’s total investment fund. The 2020 fiscal year began July 1, 2019, and ends on June 30, 2020. The fiscal 2020 Investment Plan calls for a combined overall return among all asset classes at or near the investment policy objective for the total fund (approximately 6.84% assuming the total fund's current asset allocation). The plan is forecasting near-trend global economic growth with stable, subdued inflation. The Retirement Board’s investment consultants, Callan Associates and Cliffwater LLC, reviewed and expressed support for the Investment Plan. The plan is available on the STRS Ohio website or by calling STRS Ohio’s Member Services Center toll-free at 888‑227‑7877. Like all economic forecasts, the Investment Plan is based on certain assumptions, is subject to inherent risks and uncertainties, and should not be relied on as an indicator of future performance.
NRS/STRS Ohio Website Offers Helpful Resources to Members
STRS Ohio has contracted with Nationwide Retirement Solutions (NRS) as administrative service provider for the defined contribution aspects of the STRS Ohio benefits. No matter where you are in your career in education, STRS Ohio and NRS are ready to provide you with the tools you need to help you reach your retirement goals. The NRS/STRS Ohio website is a useful resource that offers:
- Secure access to your online account
- Instructions on how to read your quarterly statement
- A Learning Center that includes financial tools and calculators
- An online retirement planning tool called My Interactive Retirement PlannerSM that helps you assess your retirement readiness
NRS has a successful history of providing quality service and is committed to achieving the highest quality standards in service for STRS Ohio members. If you need more personalized assistance, you can reach an NRS Retirement Specialist toll-free at 866‑332‑3342.
If you are looking for an investment account to supplement your STRS Ohio retirement plan, an individual retirement account (IRA), a 403(b) plan or a 457(b) plan might be a good fit. These accounts each have their own plan characteristics, such as maximum annual contribution limits, withdrawal limitations and fees. A financial advisor can help you determine if one of these plans is right for you. The Ohio Public Employees Deferred Compensation Program is a supplemental 457(b) retirement plan that is available to all Ohio public employees. You can learn more about this option at www.ohio457.org.
Investment Choice Profile
This quarter’s SmartTALK profiles the STRS Russell Midcap Index Choice.
This allocation choice is intended to closely match the return of the Russell Midcap® Index, before fees. The index is composed of approximately 800 stocks chosen for their midsize market capitalization and industry group representation. Companies in the Financial Services, Information Technology, Consumer Discretionary, Industrials and Health Care sectors make up approximately 70% of the Index. Top holdings include Servicenow, Inc., Fidelity National Information Services, Worldpay Inc., Sempra Energy and Edwards Lifesciences. Intermediate and long-term performance figures for this allocation choice are provided in the Investment Performance Report.
The Russell Indices are a trademark of FTSE International Limited (FTSE) and Frank Russell Company (Russell) and their respective subsidiary undertakings, which are members of the London Stock Exchange Group plc group. STRS Ohio investment choices are not sponsored, endorsed, sold or promoted by Russell and Russell makes no representation, warranty or guarantee regarding the use of Russell Indices or the advisability of investing in the investment choices.
How do I diversify my defined contribution account?
One method of diversifying an investment account is through asset allocation — an investment strategy where you spread your investment assets among various asset categories (stocks, bonds, real estate, etc.) to reflect your retirement goals, risk tolerance and when you plan to retire. Diversification can also include spreading your investments within each asset class. For example, your holdings in stock can be diversified by domestic/international equities. Domestic equities can be diversified by large cap/small cap or actively managed (STRS Large-Cap Core Choice) vs. passively managed (an Index Choice). One goal of diversification can be to find market segments that are likely to perform differently under different market conditions — to balance the risk/return in your portfolio. STRS Target Choice options provide diversification through a single allocation choice. To learn more, speak with a trusted financial advisor or contact a Nationwide Retirement Specialist toll-free at 866‑332‑3342.