Following the tragic earthquake in Japan that has resulted in substantial loss of life, damage to property and infrastructure, and disruption of business in the region, clients may have questions regarding exposures to Japan-related investments that may be held within TIAA-CREF Accounts and Funds. Information regarding exposures within various accounts and funds is provided below.
Accounts and funds such as the CREF Stock Account, Global Equities Account, and the TIAA-CREF International Equity Fund maintain exposure across foreign equity markets, a portion of which is typically represented by Japan-based securities. Maintaining a degree of exposure to Japan-based securities is consistent with maintaining balanced holdings across major regions throughout international markets. As of 2/28/2011, Japan-based investments comprised 22% of the MSCI EAFE Index, which many of our accounts and funds use as a benchmark representing foreign developed markets exposure. Portfolio weightings as of 2/28/2011 to Japan-based securities for accounts and funds with dedicated international exposure are as follows:
|% Japan Exposure|
|CREF Stock Account||4.8%|
|CREF Global Equities Account||9.0%|
|CREF Social Choice Account||2.7%|
|TIAA-CREF International Equity Fund||14.8%|
|TIAA-CREF Enhanced International Equity Index Fund||21.3%|
|TIAA-CREF Life International Equity Fund||15.0%|
As of 2/28/2011, the above accounts and funds maintained lower exposure to Japan than exposures represented within the MSCI EAFE Index or variations of the index that are used for each account or fund. In addition, a number of domestically-focused actively-managed funds have modest degrees of exposure to Japan-based securities. Such exposures represent out-of-benchmark positions and in all cases are limited to approximately 1% or less of fund assets.
Internationally-focused index funds such as the TIAA-CREF International Equity Index Fund have exposure to Japan-based securities in proportion to holdings represented in the benchmark MSCI EAFE Index. As noted above, as of 2/28/2011, Japan-based investments comprised 22% of the MSCI EAFE Index.
Japan-related exposure within CREF fixed income accounts or TIAA-CREF fixed income funds is not substantial and is not expected to have a material impact on performance.
The TIAA General Account invests in a diversified portfolio that includes holdings across most regions of the world. These holdings are primarily comprised of corporate and government bonds, mortgage-backed securities, commercial mortgages, commercial real estate, and other types of assets. With respect to exposure to Japan, our direct exposure to such investments is limited to less than 1% of General Account assets, and we do not anticipate that exposures to the region will have a material impact on the Account.
We will continue to monitor developments in the region and across broader global markets and will take steps as appropriate in consideration of all sources of exposure and related potential impacts on TIAA-CREF Accounts and Funds.
The allocation information provided above is as of the date indicated, and may not reflect the current holdings or market values of the Funds and Accounts.
The TIAA General Account is an insurance company account and does not present an investment return, and is not available to investors.
You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 877 518-9161, or go to www.tiaa-cref.org for a current prospectus that contains this and other information. Please read the prospectus carefully before investing.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.