By Lauren Bailey
As of April 30, 2025, public equity accounted for half of the total risk in the California State Teachers’ Retirement System (CalSTRS) investment portfolio, noted presentation materials shared during a recent board meeting.
CalSTRS’ risk team, which uses the BlackRock Aladdin risk management system to monitor the total plan portfolio, noted the public equity risk weighting was substantially higher (51%) than the approximate 39% asset weight.
The materials noted portfolio risk increased in early April 2025, primarily due to uncertainty surrounding the new U.S. tariff policy regime and its subsequent effects on global growth. Combined, public and private equities exposures now make up about 77% of the total portfolio risk.
Across all asset classes, the most significant market value and revenue risk exposure came from the U.S. (79.1%), followed by Japan (2.2%), U.K. (1.8%), Canada (1.3%), France (1.1%), China (1.1%), Germany (0.9%), Switzerland (0.8%), India (0.7%) and Taiwan (0.7%).
Magnificent Seven large-cap companies dominated the top 10 holdings in CalSTRS’ public equity portfolio, including Apple Inc. (3.8%), Microsoft Corp. (3.3%), Nvidia Corp. (3.2%), Amazon.com Inc. (2.1%), Alphabet Inc. (2.0%), and Meta Platforms Inc. (1.4%).
Meanwhile, the U.S. government — including U.S. treasuries, agency mortgage-backed securities, and other government agency debt — (64.1%) topped the list of total fixed income risk exposures. By comparison, the remaining risk exposure (3.4%) was divided between the Bank of America (0.6%), Morgan Stanley (0.5%), Citigroup (0.4%), Wells Fargo & Co. (0.4%), Goldman Sachs (0.4%), Berkshire Hathaway (0.3%), the Mexico government — including government debt and state-owned Petróleos Mexicanos — (0.3%), HSBC (0.3%), and AT&T (0.2%).
As a result, funding liquidity is a primary focus for the CalSTRS fund. As of April 30, 2025, liquid assets comprised more than half (56.0%) of the total portfolio and 3.1% was made up of cash reserves.
“The combination of cash and liquid assets provide a substantial cushion, even in periods of extended market stress,” noted the materials.
