The action was based on a report from CalPERS pension consultant Wilshire Associates which provides a review of financial market factors of 27 emerging markets including political stability, transparency and labor practices.
According to CalPERS permissible equity policy, the pension will invest in Argentina, Brazil, Chile, Czech Republic, Hungary, India, Israel, Jordan, Malaysia, Mexico, Peru, the Philippines, Poland, South Africa, South Korea, Sri Lanka, Taiwan, Thailand and Turkey on its 2005 permissible equity market list.
CalPERS will nor permit equity investments in Colombia, China, Egypt, Morocco, Pakistan, Russia, Venezuela and Indonesia.
"Emerging markets have continued to improve under our policy," said Rob Feckner, President of CalPERS Board of Administration. "We are witnessing a greater level of transparency and an increased effort by countries to reform their markets to support institutional investment."
Wilshire reported that of the 27 countries reviewed 12 improved their scores, 11 had lower scores, and 4 remain the same.
Sri Lanka and Thailand, two countries that didn't meet CalPERS standards in 2004, made the list this year after the political environment in Sri Lanka improved and Thailand expanded market capitalization in its equity markets and lowered transaction costs through levied taxes.
Argentina and Turkey were granted a one-year cure period in 2004 by CalPERS after their scores fell below the required 2.0 score. Both countries have since improved after receiving higher scores on political stability.
"These countries have made significant progress and demonstrated that they now meet our high standards for investment," said Charles Valdes, Chair of CalPERS Investment Committee.
CalPERS had approximately $3.9 billion invested in the emerging markets as of February 28, 2005.
A copy of Wilshire Associates report can be found in CalPERS press room at www.calpers.ca.gov
CalPERS is the nation's largest public pension fund with assets totaling more than $182 billion. The System provides retirement and health benefits to 1.4 million State and local public employees and their families.
