Investment Basics - Investment Report Card

The Office of the State Auditor annually provides an “Investment Report Card” as an educational tool to each relief association. The report card provides one-year and multi-year rates of return calculated for your relief association, as well as a custom benchmark rate of return. The custom benchmark rate of return can be used to measure a relief association’s actual investment performance for the year against market returns. Additional information is provided to help you understand the relief association’s individualized report card. It does not contain investment or legal advice and should not be relied upon in lieu of investment or legal advice.

Rates of Return

The one-year rate of return is the return calculated based on a relief association’s Special Fund investments for the calendar year. The three-year, five-year, ten-year, fifteen-year, and twenty-year rates of return are also provided, which show the average annual returns for the respective periods. The graph included in the report card compares the relief association’s one-year and multi-year rates of return to returns for the State Board of Investment’s Balanced Fund and the Statewide Volunteer Firefighter Retirement Plan (SVF Plan), administered by the Public Employees Retirement Association (PERA).

Asset Allocations

The beginning of year and end of year asset allocations show the percentage of a relief association’s portfolio that was invested in various asset classes. By diversifying an asset base, the goal is to create a favorable risk/reward ratio for the portfolio. When returns for one asset class decline, the expectation is that returns for another asset class will increase, offsetting the loss. The “other” asset class includes all investments besides cash, stocks, and bonds, including small allocations to this class within mutual funds and exchange-traded funds.

Benchmark Information

Custom Benchmark: The custom benchmark rate of return is the standard against which the performance of a relief association’s investments can be measured. Measuring investment returns against an appropriate benchmark encourages prudent investment decisions and gives trustees another method of evaluating investment performance. An ideal benchmark return would consist of a hypothetical portfolio of indices, invested in the same asset classes and in the same proportion as the actual holdings of the entire portfolio.  Indices track different asset classes, such as domestic equity or bonds. An index may also track subsets of an asset class, such as small‑capitalization growth domestic equity. Although benchmark indices are not directly available for investment purposes, mutual and collective index funds which hold the same securities as the index can be obtained. Known as “index funds,” these funds are managed with a passive style.

The benchmark return is calculated by multiplying the relief association’s year-end asset class proportions by the rate of return earned on a common benchmark index for each asset class. If a relief association changed investment strategies during the year, the calculated benchmark return would not reflect the changes. 

Benchmark Calculation Example:

December 31 Asset Allocation



(a) x (b)






Domestic Stock


Russell 3000



International Stock


MSCI ACWI ex. U.S. Net





Bloomberg U.S. Aggregate





ICE BofA US 3-Month TR Bill





Russell 3000



Benchmark Return



Sum (c) =  



Index Returns: The benchmark indices used to calculate the relief association’s custom benchmark rate of return are provided in the Benchmark Information section of the report card, along with the rate of return for each respective index. 

  • Russell 3000 Index – A performance measure of the overall S. stock market. This index includes the 3,000 largest publicly traded U.S. companies.
  • MSCI ACWI ex. U.S. Net Index – A performance measure of international stocks, including developed markets and emerging markets. This index does not include the U.S. stock market’s performance and is net of taxes on dividends.               
  • Bloomberg U.S. Aggregate Bond Index – A performance measure of the U.S. investment-grade bond market, including corporate and government bonds.
  • ICE Bank of America US 3-Month Treasury Bill – A performance measure of short-term cash investments.
  • S&P 500 A performance measure of the 500 largest U.S. publicly traded companies.
  • NASDAQ Composite A performance measure of over 3,300 common equities listed on the NASDAQ stock exchange.
  • Dow Jones Industrial Average A performance measure that tracks 30 large, publicly traded companies trading on the New York Stock Exchange and the NASDAQ.

State Board of Investment Returns: Relief associations are authorized to invest assets in six investment options within the Minnesota State Board of Investment’s (SBI’s) Supplemental Investment Fund (SIF). It is not the intent of the SBI to provide investment advice to relief associations. Relief associations may wish to consult an investment advisor for guidance regarding their asset allocations. The SBI Returns section of the report card provides the rates of return for the six SBI funds available to relief associations. The SBI rates of return serve as an additional benchmark for a relief association, showing returns that were available during the year. The six accounts are listed below.

  • Balanced Fund – a balanced portfolio utilizing both common stocks and bonds.
  • Bond Fund – an actively managed, bond portfolio.
  • Broad International Equity Fund – a portfolio of non-U.S. stocks that incorporates both active and passive management.
  • Money Market Fund – a portfolio utilizing short-term, liquid debt securities.
  • U.S. Equity Actively Managed Fund – an actively managed, U.S. common stock portfolio.
  • U.S. Equity Index Fund – a passively managed, U.S. common stock portfolio.

Additional Resources

More information can be found in our Pension Investment Basic Series found in the Investment Basics Topic.

Additional information is provided for in a Statement of Position on Relief Association Investment Authority and in another Statement of Position on Relief Association Investment Policies.

Last Updated May 2024