Press Release July 17, 2003

Washington's Investment Board restructures International Equity Program creating opportunities for better performance
(July 17, 2003)

Olympia - The Washington State Investment Board today voted to restructure its International Public Equity Program which, as of June 30, 2003, represents $5.6 billion of the total $38.6 billion state retirement funds. The program is invested in both developed and emerging markets and the most significant changes approved by the Board would:

	Invest 95 percent of the fund in developed markets and 5 percent in emerging markets. The current mix is 90 percent developed markets and 10 percent in emerging markets. The 5 percent strategic emerging markets allocation would be 100 percent actively managed.
	Shift the developed markets component of the program to be more actively- managed with a new 60 percent/40 percent mix between active and passive management. The current management structure is 50 percent passive and 50 percent active.
	Subject to Board approval at a later date, half of the 40 percent passive allocation could be moved into and managed within an "enhanced" management strategy that could also result in opportunities for better performance.

"Our international equity program is a strong component of a strategic and well-balanced investment plan and with these changes the intent of the Board is to make it even stronger," said WSIB Executive Director Joe Dear. "With a higher percent of active management and enhanced indexing this restructuring gives the WSIB and fund managers more flexibility to capture investment opportunities that could result in better returns as the economy improves."

The new plan maintains the current 15 percent target allocation for International Equity in the WSIB retirement fund asset mix. Finally, the new plan only impacts program structure. The line-up of fund managers remains the same and no changes are anticipated until after the new international structure is established.

In other significant news, WSIB staff reported that for the first time in two years, the total retirement fund rate of return ended in positive territory. As of June 30, 2003 the fund was up by 3.1 percent compared to -6.4 percent for the same time period a year ago and-6.0 percent for 2001.