Yesterday State Treasurer Janet Cowell tried to spin her poor investment performance as a positive in order to justify her legislative agenda to move more of state employees' retirement funds into risky alternative investments.

Cowell's investment strategy only achieved 4.89 percent for the quarter ending Sept. 30, 2013.

In a press release, Cowell tried to disguise her poor performance results with another call "to continuing to diversify the portfolio to keep it growing for the families across our state who depend on it."

SEANC Legislative Affairs Director Ardis Watkins said, "It is ironic that Treasurer Cowell is using these dismal results showing underperforming alternatives as her rationale for wanting to throw more money down that rabbit hole."

Since 2000, the N.C. General Assembly has allowed investments in alternatives to grow from 5 to 35 percent of the retirement system and has no positive growth to show for it. Cowell requested the authority to invest 40 percent of TSERS in risky alternative investments in the 2013 General Assembly session. SEANC opposed any expansion of alternative investment authority. Ultimately a bill was passed to increase investment authority to 36 percent.

The Treasurer's strategy of putting money in alternative investments rather than equities cost the system a billion dollars in just this quarter. This past quarter alternative investments yielded just 3 percent for retirees and millions in fees to Wall Street.

If North Carolina had invested 65 percent in stocks and 35 percent in bonds with zero allocation in alternative investment categories, the system would have realized a third quarter return of 6.17 percent, instead of 4.89 percent. We would also have over a hundred million dollars we wasted on fees for these investment managers.

Cowell's failed strategy hasn't affected just this quarter. The BNY Mellon Master Trust Universe for Public Pension Funds one-year median return was 12.25 percent versus N.C.'s 9.97 percent, three years 10.29 percent versus N.C.'s 8.82 percent and five years at 8.23 percent versus N.C.'s 7.78 percent.