ICC Master Trust Finishes 2003 With Strong Showing

January 26, 2004 (PLANSPONSOR.com) - Riding high on fourth-quarter 2003 equity strength, the median master trust in the universe of the Independent Consultants Cooperative (ICC) ended the year with an 8.4% fourth-quarter gain and a strong 21.9% advance over the year.

According to an ICC announcement, the median US equity portfolio in the firm’s institutional database gained 12.4% for the fourth quarter, while the median US bond portfolio could only manage a modest 0.6%. For the year, the median US equity portfolio achieved a return of 32.3%, and the median US bond portfolio earned 5.1%. At the end of 2003 the median overall equity exposure for plans in the universe was 61.6% and the median commitment to international equities was 9.9%.

As the US dollar continued to weaken, plans also gained from exposure to international markets, ICC said. The median international developed markets equity portfolio earned a return of 15.5% in the fourth quarter and 34.8% over the year. Emerging markets equity returns were even stronger, with the median portfolio invested registering gains of 17.5% for the final three months and a whopping 55.2% year to date. The median global bond portfolio earned 5.2% in the last three months and 16.6% in 2003.

All styles of domestic equity investing had positive results, but there was a six percentage point difference between the returns achieved by the most and the least successful strategies in the fourth quarter. The median small cap value portfolio return was 15.9%, while the median large cap growth portfolio earned 9.9%, ICC said. As in the third quarter, the median large cap, mid cap, and small cap portfolios had progressively higher returns. In the fourth quarter, however, the median value portfolio outperformed the median growth portfolio in each market capitalization class.

In the domestic bond arena, core fixed income portfolios had median returns of 0.4% for the quarter and 4.7% for the year, respectively. In comparison, the median high-yield portfolio turned in a more respectable performance, gaining 4.8% in the three months and 21% in the twelve months ended December 31. The median bond exposure among plans in the universe was 30.2% at year end. The duration of the median US bond portfolio stood at 4.1 years, modestly higher than the median 3.98 years’ duration in September 2003 and greater than the median duration of 3.79 year-end 2002.

The database include more than 18,000 portfolios in all asset classes, with an aggregate market value of $1.5 trillion. The portfolios are sponsored by approximately 1,400 organizations. For more information go to  www.icc-group.com