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Investing July 15, 2008
Equity Allocation Makes Little Difference in Target Fund Q208 Performance
July 15, 2008 (PLANSPONSOR.com) - An Ibbotson
analysis of 204 target-maturity funds suggests the stock-bond
split which is usually the primary driver of return
differences across the risk spectrum did not have a clear
impact on performance as aggregate stock market and aggregate
bond market performance were similar in the second quarter of
2008.
Reported by Rebecca Moore
The average target-maturity fund lost 0.9% in the second quarter – significantly better than the first quarter’s loss of 6.8%, according to the Ibbotson report. Target-maturity funds outperformed the S&P 500 Index, which declined 2.7% during the second quarter.
Among underlying asset classes, growth stocks outperformed value stocks and, on a relative basis, small-cap stocks outperformed large-cap stocks. Commodity futures were again the top-performing asset class of the quarter (16.1% in Q2 following last quarter’s 9.6% return).
The four fund families with positive returns all contained exposure to commodities with the standout fund family containing the largest commodity exposures. Conversely, fund families without commodities and a tilt toward value stocks relative to growth stocks were hurt during the quarter. The other commonality among last quarter’s worst performers was a sizable allocation to real estate, Ibbotson said.
align="right"> Date | align="center"> Max | align="center"> Average | align="center"> Min | align="center"> # of Funds |
align="right"> Income | align="right"> 0.5% | align="right"> -0.9% | align="right"> -3.2% | align="right"> 21 |
align="right"> 2000 | align="right"> 0.3% | align="right"> -0.7% | align="right"> -1.6% | align="right"> 2 |
align="right"> 2005 | align="right"> 0.2% | align="right"> -1.0% | align="right"> -1.8% | align="right"> 6 |
align="right"> 2010 | align="right"> 2.4% | align="right"> -0.8% | align="right"> -1.9% | align="right"> 25 |
align="right"> 2015 | align="right"> 2.5% | align="right"> -1.0% | align="right"> -4.2% | align="right"> 22 |
align="right"> 2020 | align="right"> 2.3% | align="right"> -0.9% | align="right"> -3.8% | align="right"> 26 |
align="right"> 2025 | align="right"> 0.3% | align="right"> -1.1% | align="right"> -2.4% | align="right"> 18 |
align="right"> 2030 | align="right"> 2.7% | align="right"> -0.8% | align="right"> -2.2% | align="right"> 24 |
align="right"> 2035 | align="right"> 0.6% | align="right"> -1.0% | align="right"> -2.4% | align="right"> 17 |
align="right"> 2040 | align="right"> 0.9% | align="right"> -1.0% | align="right"> -2.7% | align="right"> 22 |
align="right"> 2045 | align="right"> 0.7% | align="right"> -1.0% | align="right"> -2.3% | align="right"> 13 |
align="right"> 2050 | align="right"> 0.1% | align="right"> -1.1% | align="right"> -2.9% | align="right"> 7 |
align="right"> 2055 | align="right"> -0.4% | align="right"> -0.4% | align="right"> -0.4% | align="right"> 1 |
align="right"> 204 |
align="center"> Asset Class | 2Q 2008 Return | align="center"> 12 Month Standard align="center"> Deviation (Annualized) |
Large Growth | align="right"> 1.2% | align="right"> 14.9% |
Large Value | align="right"> -5.3% | align="right"> 13.9% |
Small Growth | align="right"> 4.5% | align="right"> 17.9% |
Small Value | align="right"> -3.5% | align="right"> 16.2% |
Non-U.S. Developed | align="right"> -2.3% | align="right"> 16.3% |
Emerging Markets | align="right"> -0.8% | align="right"> 28.2% |
Real Estate | align="right"> -4.9% | align="right"> 21.5% |
Commodities (Futures) | align="right"> 16.1% | align="right"> 18.8% |
High Yield | align="right"> 1.8% | align="right"> 7.8% |
Aggregate Bonds | align="right"> -1.0% | align="right"> 2.6% |
Short-Term Bonds | align="right"> -0.6% | align="right"> 2.3% |
Cash | align="right"> 0.3% | align="right"> 0.6% |
Source: Ibbotson Associates