Bond Gains, Equity Losses Define Q3 Master Trust Returns

November 8, 2004 ( - The Independent Consultants Cooperative (ICC) has released the third quarter returns for its investment universe, with US Fund sponsors gaining a mediocre 0.3% from July to September.

The ICC universe, comprised of $1.4 trillion aggregate market value split between 19,000 portfolios held by 1,400 organizations, saw rising bond values compensate for falling equity values overall. As part of the median master trust in the ICC universe, US Bonds were up 3.2% in the third quarter, offsetting the 1.9% fall in US equities. International equities, on the other hand, brought pronounced returns of 9.4%. This was down only slightly from the preceding quarter, which saw a 10.2% gain in this area. Meanwhile, international development equity markets gained 0.5% on the quarter, which was considerably lower than emerging markets, which saw a 7.6% growth figure. Global bonds were only slightly lower then their domestic counterparts, pulling in 3.1% for the quarter.

Breaking down the domestic bond arena, ICC reports that the median high yield portfolio outperformed core bonds, pulling in 4.8% for the quarter, compared to the 3.2% for core bond holding. The median bond exposure for funds was at 30.8%, with average duration of holdings at 3.9 years.

Breaking down domestic US equities, all styles, ranging from large-cap growth to small-cap value, posted negative returns in the third quarter. The worst performer, mid-cap growth, lost 4.5%, while the best performer, large-cap value, lost only 0.1%.

In the twelve months ending in September, the median master trust gained 11.8%, while the median US equity portfolio gained 14.9%.   In sharp contrast to equities, the median bond portfolio gained only 4.2%. At the end of the third quarter, the average overall equity exposure for funds in the ICC universe was 59.7%.

ICC ( ) is a consortium of independent investment consulting firms.