Chief Investment Officer Scott Chan acknowledged the hard work of the investment staff that enabled CalSTRS to generate an unofficial 13% return over the last calendar year, well above the 7% actuarial goal.

While CalSTRS tracks its calendar-year performance annually, the fiscal year is the official metric by which short- and long-term performance is measured. For CalSTRS, the fiscal year spans from July 1 through June 30.

Chan told the Investment Committee that as of December 2025, CalSTRS had more than $392 billion in assets under management.

These returns are above the rate needed to meet CalSTRS’ obligations to California's public school educators.

While acknowledging the strength of recent performance, Chan underscored the importance of looking beyond headline returns to the deeper structural forces shaping the investment landscape. These underlying currents carry the potential to introduce greater volatility across global markets. Such volatility, Chan noted, is not necessarily negative; could lead to opportunities for disciplined, long‑term investors.

To navigate this environment and ensure a resilient portfolio, Chan articulated three strategic pillars to guide the investment team:

1. Preserving and enhancing diversification: A diversified portfolio remains the most effective way to mitigate risk while maintaining exposure to a broad set of opportunities.
2. Adopting a more dynamic approach to asset allocation: This could enable the fund to respond thoughtfully to shifting market trends and liquidity conditions.
3. Strengthening liquidity management: This ensures the ability to deploy capital deliberately—whether to capture opportunities during stress or preserve balance sheet strength.

By looking ahead, CalSTRS can position itself to meet the challenges of a market likely to see greater volatility while still securing the future of more than 1 million members and beneficiaries.