The Massachusetts state pension fund made a 12.7 percent gain for the fiscal year ended June 30, according to a report to the board Tuesday.
The fund ended the year with $53.2 billion in assets, a record year-end figure, after adding $6.2 billion in value.
Domestic equities led the way, with a 22.1 percent return that beat the S&P 500. Global equities generally produced strong returns amid a rising market.
Bonds were weak, falling 0.3 percent but beating their benchmark. Hedge funds marked a turnaround from prior years: they rose 12.2 percent as the state continues its program of investing directly in the vehicles, rather than through middleman funds.
Michael Trotsky, the fund’s executive director, said the performance came despite a period of internal challenges, including pay and hiring issues.
Now, he said in an interview, “We have an aggressive agenda laid out for 2014.”
That includes an effort to save $100 million a year in fees and expenses on investments.
Treasurer Steve Grossman said some of the innovations being unveiled this year could be a model for other public pension funds.