Pension Funds Boosted By Oil

[mahatmakanejeeves]

Pension funds are investing in commodities on behalf of their investors.

Pension Funds Boosted By Oil

Pension Funds Boosted By Oil
While Stocks Fall, Commodity Bets Are Paying Off

By David Cho
Washington Post Staff Writer
Monday, July 7, 2008; Page A01

Soaring fuel prices that are burning a hole in the wallets of consumers are not only benefiting oil companies and Middle Eastern producers. They are also lighting up the investment returns of pensions funds, which millions of ordinary Americans are counting on for their retirement.

California's public employees' pension fund, the world's largest, made its first investment of $1.1 billion into oil and other commodities early last year, and since then, Calpers has seen it soar 68 percent. Fairfax County pension managers have enjoyed a 61 percent return from a similar move over the past 12 months, far outpacing any other segment of the fund's portfolio.

"Our commodity investment has really helped," said Robert L. Mears, executive director of Fairfax County's Retirement Administration Agency. "This year would have been a lot worse."

Other pension funds are rushing to get in on the action as the prices of oil, precious metals, corn, uranium and other vital goods continue to reach record highs. Montgomery County officials are in the process of shifting 5 percent of their $2.7 billion pension fund away from stocks and into commodities.

These funds are part of a tidal wave of investment dollars that has flooded commodity markets in recent years and, critics say, contributed to the run-up in prices.

[islandmkl]

1. one hopes they know when to take their money and run....

a 'bursting bubble' can turn all of this around...

but hey, when has that ever happened?

[mahatmakanejeeves]

2. That's why they're making the big bucks.

Just like the folks who ran Long-Term Capital Management.

Oh, wait.

No problem. Someone will ring a bell when the market hits its top. Isn't that how it happens?

Bad pension moves and accounting irregularities have made a mess of San Diego's finances (April 10, 2005)