Mercer Finds Equity Markets End 2009 Strong

February 8, 2010 (PLANSPONSOR.com) - Mercer’s fourth-quarter 2009 Defined Contribution Universe Summary found gains in all equity markets during the period.

A Mercer news release said the S&P 500 Index gained 6% during the quarter, while the Barclays Capital Aggregate Bond Index posted a gain of 0.2%. Money market instruments had a zero return, as measured by the three-month T-bill rate.

The balanced asset class, using a benchmark of 60% S&P 500/40% Barclays Capital Aggregate Bond Indices, posted a gain of 3.7%. International equity markets, as measured by the MSCI EAFE Index, gained 2.2% during the fourth quarter.

The international equity asset class underperformed U.S. equities for the quarter by 380 basis points. Global equities gained 4.1% for the quarter and outperformed international equities by 190 basis points. 

Over a 10-year time frame, the S&P 500 Index lost 1%, while the Russell 2000 Index gained 3.5%. International equity markets gained 1.2% over a 10-year time frame, outperforming their U.S. counterparts. Over a 10-year period, the fixed income asset class produced a return of 6.3%, significantly above U.S. equity returns (as measured by the S&P 500 Index) over the same time period.

According to the news release, Mercer's quarterly report analyzes returns of various funds to help institutional investors evaluate their mutual fund managers’ performance against other funds and asset class benchmarks.