VRS Investment Portfolio Up in Fiscal Year 2003

RICHMOND, Va., August 28, 2003 —The Virginia Retirement System announced today that the fund posted a positive 2.5 percent return for the fiscal year, noting also that calendar year-to-date the fund is up over 9 percent and up over 11 percent for the quarter. The majority of the positive annual return came from the system's fixed income portfolio which returned 10.4 percent and the real estate program which posted a 7.4 percent return.

The fund ended the year at $34.6 billion. Longer term, the fund was down 4.2 percent annualized for the three-year period and up 2.6 percent for the last five years reflecting the negative experience of the past two years.

The portfolio had $16.4 billion invested in U.S. equities, $5.4 billion in non-U.S. equities, $8.3 billion in fixed income, $1.6 in real estate and $2.1 billion in private equity at June 30. Both U.S. and Non-U.S. equities regained most of the losses experienced in the first half of the year to end with returns of 0.5 percent and –3.4 percent respectively. Private equity, which is reported with a one-quarter lag, was down 10.8 percent.

The equity market was quite volatile during the year, but experienced a tremendous turn around after significant losses in both the first quarter and around the beginning of the calendar year. Once again, we find that our strategy of prudent diversification helped us weather these markets with both our fixed income and real estate investments helping to alleviate some of the impact experienced in the equity markets,” said Chief Investment Officer Nancy C. Everett.

Contact: Jeanne Chenault 804-697-6665

VRS is the 29th largest public or private pension fund in the United States with a $35 billion portfolio.

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