The Meb Faber Show - Better Investing
MEBISODE: Should CalPERS Fire Everyone And Just Buy Some ETFs? | #526
Mar 22, 2024
Exploring CalPERS management and investment strategy, analyzing portfolio performance and comparing to benchmark strategies. Discussing portfolio replication, risk parity, and Bridgewater's alpha strategy. Emphasizing the benefits of strategic portfolio design using ETFs for lower fees and taxes.
18:16
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Quick takeaways
- CalPERS's complex investment approach failed to outperform simple benchmarks, raising doubts about their strategy effectiveness.
- High management fees in portfolios like Bridgewater's all-weather strategy can be avoided by replicating similar returns with basic global market portfolios.
Deep dives
CalPERS Investment Strategy Analysis
Analyzing CalPERS investment strategy reveals inefficiencies in their portfolio allocation and management. Despite their mission to deliver retirement benefits, CalPERS invested heavily in private funds, leading to excessive complexity and high fees. Comparisons with basic asset allocation strategies like 60/40 portfolios and global asset allocations showed that CalPERS failed to outperform these simple benchmarks, raising questions on the effectiveness of their investment approach.
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