Institutional Investor Returns Flat in Third Quarter 2004

October 28, 2004 ( - US institutional investors posted flat returns in the third quarter due to faltering equities, but 12-month trailing figures still show double-digit positive returns.

The figures, which represent the performance of 300 institutional investment plans that subscribe to Northern Trust performance measurement services, show that public funds performed the best in the third quarter relative to ERISA and foundation & endowment plans, gaining 43 basis points. ERISA plans gained only 10 basis points for the same time frame, while foundation & endowment plans gained an average of eight basis points in the third quarter.

Northern Trust attributed this mediocre performance to an increased fund allocation to equities, which faltered in the third quarter. This poor performance offset the gains made in bonds, private equity and real estate.

Year-to-date figures are somewhat more encouraging, with the median plan advancing 3.5%. For the trailing 12-month period ending September 30, most plans continue to post double-digit returns, with the fourth quarter 2004 results contributing the most to these numbers. For ERISA plans, the past 12 months have brought 13.1% gains, while public funds are slightly behind at 12%. Foundations & Endowments lead both, however, posting 13.4% gains for the previous year.

The funds included in the figures by  Northern Trust , the Chicago-based multibank holding company, hold over $390 billion in assets under management.