Foundations and Endowments Hit Hardest by Q3 Market Decline

November 8, 2011 (PLANSPONSOR.com) - Among institutional asset owners, not a single category reported positive median returns during the third quarter, according to the Wilshire Trust Universe Comparison Service (Wilshire TUCS).  

Foundations and endowments saw the greatest decline in median performance at -9.24%, while Taft- Hartley health and welfare funds had the best median return at -2.26%.

Foundations and endowments also had the worst median return for the year at 0.71%, but those foundations and endowments with assets greater than $500 million had the best one- year median return at 3.31%and a median quarterly return of -6.95%.

“In a quarter where equity exposure pulled down total plan returns, Taft-Hartley health and welfare funds were rewarded for the large exposure to debt with a median allocation to bonds of 75.66%, which easily outpaced the next largest median bond allocation segment of 36.71% for corporate funds,” said Robert J. Waid, Managing Director, Wilshire Analytics.

“The overall results across Wilshire TUCS are not surprising given the fact that battered by worries over a worldwide economic slowdown, a headline-grabbing downgrade of United States Treasury debt and the ongoing European debt crisis, the global stock markets took a tumble during the third quarter of 2011 with the Wilshire Global Total Market IndexSM falling -20.66%,” added Waid. “Here in the U.S., the stock market fell in all three months of the third quarter, with the Wilshire 5000 Total Market IndexSM returning -15.04% for the three month period.”