Treasurer Folwell Announces In-House Indexing Fund Fund will reduce complexity, add value

(Raleigh, NC) – State Treasurer Dale R. Folwell, CPA announced that $100 million in passive indexing funds are now being managed in-house as a means of reducing fees paid to outside investment  managers while maintaining performance as measured by the Russell Top 200 index strategy and the Russell Mid Cap index strategy.

“Managing investments internally allows us to reduce complexity and build value for members of our retirement system and keep the money we would have spent on fees in North Carolina," said Treasurer Folwell. “It expands the cost-cutting steps we have already taken to ensure the financial stability of the pension plans that protect the futures of 900,000 North Carolinians."

To date, the Department of State Treasurer (DST) has saved more than $60 million in outside investment fees in 2017 for a potential savings of $250 million the next four years.

The $100 million portfolio launched Nov. 1 will be expanded by billions of dollars over the next few months with a goal of bringing all $12.5 billion of U.S. passive management assets in-house in 2018. Annual savings from eliminating external management fees are estimated at $2.4 million across U.S. and non-U.S. passive equity as DST brings passive exposure in-house.

The announcement was made during the treasurer's monthly “Ask My Anything" conference call. Treasurer Folwell also praised Rhonda M. Smith, DST's Investment Director for Public Equity; Greg Taylor, a DST trader and analyst; and Casey High, DST trader and senior analyst; for their work on the new internal management capability.

“Our investment team was faced with a big goal and a short deadline," said Folwell. “They met that goal and are ready to ramp up our internal management capabilities even further."

(Pictured in the attached photo, left to right: Casey High, DST trader and senior analyst; Rhonda M. Smith, DST Investment Director for Public Equity; State Treasurer Dale Folwell, CPA; and Greg Taylor, DST trader and analyst).               

Audio from the November “Ask My Anything" call can be found by clicking here.