August 06, 2012
--- Negative domestic and international returns may have caused
U.S. institutional investment plan sponsors in the Northern Trust Universe to
lose 1.5% at the median in the second quarter. ---
However, positive returns in most quarters since 2009 have
boosted longer-term performance, and the median plan in the Northern Trust
Universe has a three-year return of more than 11%, according to Northern Trust.
In the second quarter, corporate Employee Retirement Income
Security Act (ERISA) pension plans led all segments with a loss of -0.8% at the
median, while public funds lost 1.7% and the foundations & endowments
segment fell 2% at the median for the three months ending June 30.
“Asset allocation played a role in relative performance
between the segments in the second quarter,” said William Frieske, senior
performance consultant, Northern Trust Investment Risk & Analytical
Services (IRAS). “Corporate ERISA plans benefited from a higher allocation to
fixed income, which was up modestly while equities were down across the board.
Public fund performance suffered from a larger allocation to non-U.S. equity.
Foundations and endowments lagged the other segments mostly due to a smaller
allocation to fixed income, slightly negative results for hedge funds and the
poor performance of U.S. equity.”
The median U.S. Equity Program in the Northern Trust
Universe was down 3.9% in the second quarter, after gaining 13% in the first
quarter. International equities lost more, with the median program down 7% in
the quarter. Fixed income programs had a positive return of 2.3% at the median,
with most of that performance coming from U.S. programs. Hedge funds returned