CalSTRS, the world's largest educator-only pension fund, has gradually reduced its fixed income weight and has high hopes for U.S. stocks, its chief investment office said on Wednesday.
"We're still heavily tilted toward stocks, and we're going to stay that way," Chris Ailman told CNBC's "Closing Bell."
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The California State Teachers' Retirement System, or CalSTRS, manages pension and retirement benefits for public California educators.
At points in the past, half of its assets were in fixed income, Ailman said. Amid low bond yields and an uncertain interest rate environment, CalSTRS has reduced its fixed income exposure over time, he said.
Fixed income now makes up about 16 percent of its assets.
"We're looking at long-term trends being for higher rates in the future," Ailman said.
CalSTRS holds a roughly 58 percent stake in stocks. While two-thirds of that is still held in U.S. names, Ailman is optimistic on Japanese equities.