Investment Performance

Rhode Island’s State Investment Commission (SIC) and Rhode Island Treasury strive to deliver strong long-term returns and reduced risk for the state’s investments. Financial markets can be volatile, and it is normal for the performance of the state’s investments to fluctuate in the short-term. Long-term average performance is the best measure of a fund’s health and sustainability.

There are many ways to judge the investment performance of a fund. For Rhode Island, one important measure of performance is the pension system’s target annual rate of return, currently 7.0%. This is the number that is used to calculate the funded status of the pension system. Due to the volatility of the financial markets, the state does not expect investment performance to meet the 7.0% mark every year, but has set a goal of achieving an average annual performance of 7.0% over a long period of time. 

More information about the fund's investments, including additional information on fund and individual investment performance are available in the monthly SIC books.

Another way to judge performance is a comparison with the fund’s policy benchmark, which compares Rhode Island’s performance to the hypothetical performance of an average fund with the same asset allocation as Rhode Island. Rhode Island’s performance relative to the policy benchmark is a measure of the quality of investment managers that the state is selecting.

The 60/40 is a hypothetical portfolio that consists of 60% US stocks and 40% US fixed income. 60/40 was a common asset allocation for pension systems in years past, but is rarely used today as more sophisticated investment strategies have become available.