On July 22, Colorado PERA released its 2019 Investment Stewardship Report, highlighting PERA’s commitment to long-term financial sustainability through investment cost stewardship.

PERA’s approach to investment stewardship is straightforward: Seek out quality investments that are expected to provide the best risk-adjusted returns to PERA’s portfolio over the long term. As fiduciaries to PERA’s active, inactive, and retired members, PERA has a responsibility to achieve financial performance in order to provide retirement benefits to its members. Stewardship encompasses all risk and opportunity factors that are important to consider when making investment decisions.

The report, now issued for a second year, outlines PERA’s efforts to keep costs low, advocate for strong and fair markets, and incorporate relevant factors into its investment decisions.

PERA uses a four-part stewardship approach to achieve financial sustainability over the long term:

• Protect the assets under management through cost savings and cost consciousness;
• Integrate relevant factors into investment decisions, including environmental, social and governance (ESG) considerations that may be financially material;
• Advocate for robust markets using PERA’s voice, vote, and authority as a long-term institutional investor; and
• Evaluate the exposures in PERA portfolios, including exposures to ESG factors, to identify value drivers.

PERA diligently manages investment costs on behalf of its members, recognizing that the costs of investing should not outweigh the benefits of investing. The report considers three avenues for investment cost stewardship:

• Reducing fees for investment options available to members through participant-directed defined contribution plans including the 401(k), 457, and Defined Contribution options;
• Managing assets internally and partnering with external experts where partnerships add value;
• Unbundling trading costs from research costs in public equity markets.

Prudent investments at fair costs translate into the retirement security that PERA is charged with attaining for its members.

As a long-term investor, PERA’s investments must be positioned to deliver value for members both today and in the future. Factors that impact the long-term performance of investments, which may include, but are not limited to, environmental, social and governance issues, are critical to PERA’s investment strategy. Issues ranging from consumer trends to climate change to corporate culture may all have the potential to impact the financial profitability of an industry or business. PERA investment professionals are experts in their field and fully consider all financially material factors when evaluating investment risks and opportunities. PERA invests in companies with competitive advantages which can offer financial rewards that outweigh risks over the long run.

PERA is committed to improving disclosure, and the 2019 Investment Stewardship Report is one to deliver on that commitment. View the Investment Stewardship Report infographic. Financial performance, information about management fees, voting guidelines and voting records are all available at copera.org.