Indexing Nevada PERS: Steve Edmundson’s $60 Billion Strategy | #527
Today’s guest is Steve Edmundson, the Chief Investment Officer of the Public Employees’ Retirement System of Nevada, which manages over $60 billion. As pension funds continue to hire more employees, pay more and more fees and build more complex portfolios, Steve is an outlier for his approach that emphasizes simplicity over complexity. He’s one of two investment professionals on staff and has indexed 100% of all publicly traded asset classes. I love it! Steve talks about the culture that allows this model to work and shares some thoughts on the rise of private markets and the impact of higher interest rates. The late Jack Bogle had a quote that applies well to Steve & Nevada PERS: “Don’t do something, just stand there!”
Key Points
- Steve Edmonson, the CIO of the Public Employees' Retirement System of Nevada, manages over $60 billion primarily through a simple, indexed approach with an emphasis on high-quality assets and low fees.
- The Nevada pension fund's portfolio is unique in its simplicity, indexing 100% of its public market assets, holding no emerging market stocks or credit risk, and maintaining a bond allocation of 100% treasuries.
- While the fund does include a 12% allocation to private markets for diversification and slight volatility reduction, its overall strategy demonstrates that disciplined, long-term investing with a focus on asset allocation and cost control can be successful.
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Transcript
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