Foundations and Endowments See Negative Performance in 2011

The majority of institutional asset owners closed 2011 in positive territory, according to the Wilshire Trust Universe Comparison Service (Wilshire TUCS). 

The only plan category with a negative median annual return was Foundations and Endowments at -0.73%. Coming in at 4.64%, the category had one of the lowest median fourth-quarter returns. Foundations and Endowments with assets greater than $500 million had a one-year median return of 0.95% and a median quarterly return of 3.60%.

At 2.60%, Taft-Hartley Health and Welfare Funds had the lowest median fourth-quarter return. This can be attributed to their significant exposure to debt with a median allocation to U.S. bonds of 73.73%. On the other side of the scale, Taft-Hartley Defined Benefit Plans were rewarded with a top median fourth-quarter return of 5.94% for their 41.40% and 5.82% exposures to U.S. Equities and Real Estate, respectively. For the year, the plans saw a 0.86% median return.

“The fourth quarter was one where large plan underperformance can be partially explained by the asset allocation difference between U.S. equities and non-U.S. equities,” said Robert J. Waid, managing director of Wilshire Analytics. “Large plans consistently had more equity exposure to non-U.S. equity and less exposure to U.S. equity than other categories in Wilshire TUCS. In a quarter where the Wilshire 5000 Total Market Index rose 12.02% and non-U.S. measures rose less than 4%, this allocation difference cost large plans,” he said.

For all master trusts included in Wilshire TUCS, the annual median return was 1.05%, while master trusts with greater than $1 billion in assets had a one-year median return of 1.61%. The largest plans with $5 billion or more tallied a median 12-month return of 1.45%.

Looking at public pension plans, those with assets of more than $5 billion and those with greater than $1 billion saw median fourth-quarter returns of 4.42% and 4.34%, respectively, and matching 2011 median returns at 0.86%. For the fourth quarter and the year, all public pension funds showed median returns of 5.31% and 1.02%, respectively.

Among corporate plans, the returns by all plans saw median performances of 5.64% for the quarter and 2% for the year. In the category that includes corporate plans with assets greater than $1 billion, the median quarterly and annual returns were 5.17% and 2.68%, respectively.

For more information about the Wilshire Trust Universe Comparison Service, e-mail