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RALEIGH State Treasurer Dale Folwell reported Thursday that preliminary state pension fund returned gains of 2.7 percent for the second quarter of 2017 ending June 30. Pension fund assets were valued at $93.9 billion, up from $92.2 billion at the end of the first quarter of 2017.”The state pension fund achieved its highest valuation ever during the second quarter of the year,” said Folwell, a Republican. “In this low interest rate environment, we are pleased our funds did so well, while at the same time, the pension fund as a whole had less exposure to risk. I want to thank those responsible for this great performance but I am cautious about returns going forward.”The caution may be warranted as returns for the fund over the full fiscal year ending June 30 reported impressive gains of 10.6 percent.A bulk of the gains can be attributed to U.S. equities registering new record highs throughout the second quarter as the eight-year bull market in stocks marches higher despite geopolitical and valuation worries. The pension fund’s public equity holdings, which make up nearly 40 percent of the fund’s portfolio, reported returns of 19 percent. By comparison, the S&P 500 rose approximately 15 percent over the same time period.Nearly all other investment categories from private equity, to opportunistic fixed income, to inflation-sensitive investments sported fiscal year gains in double-digit percentages. The only investment category in the red over the 12-month period was investment grade bonds, which reported a loss of 0.3 percent.The reported returns are issued net of all expenses and fees. To date, Folwell has reduced investment management fees by more than $60 million, on pace to reduce fees by approximately $240 million by the end of his first term as state treasurer. Folwell campaigned on reducing fees by $100 million during his first year in office through renegotiating contracts with investment managers. The last reported fiscal year results in 2016 showed a mere 0.8 percent return, while paying more than $600 million in fees to investment managers.