CalPERS or the California Public Employees' Retirement System has decreased its investments in commodities futures at the start of 2013. The largest public pension manager in the US increased its total inflation hedge rate in the same period.
Overall, CalPERS increased its investments in inflation-linked assets to US$10 billion by January 2013's end. This is 3.9% of the value of the fund, which is an increase from US$7.6 billion or 3.0% just last December 2012. This was the highest allocation made by the fund ever since the management reported monthly numbers since 2011.
CalPERS though continued to avoid commodities in order to insulate its members against rising prices. The fund cut its allocation to commodities to just US$1.3 billion from US$1.6 billion by December 2012's end.
The fund was hedged against tactical inflation assets with a US$2.4 billion allocation for either commodities or inflation linked bonds, depending on the fund manager's views.
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