Plans benefited from positive returns in both the equity and fixed income markets. The median U.S. equity portfolio advanced by 3.1%, while the median U.S. fixed income portfolio rose 2.6%. In the twelve months ended March 31, the median master trust gained 27.2%, the median US equity portfolio roared ahead by 42.6%, and the median US bond portfolio, 6.2%. At the end of the first quarter the median overall equity exposure for plans in the universe was 60.8% and the median commitment to international equities was 10.2%.
International markets helped plans during the period. The median international developed markets equity portfolio had a 5% showing in the first quarter and 57.1% in the twelve-month period. Emerging markets equity returns were even stronger, with the median portfolio invested in that asset class registering a first-quarter advance of 8.6% and 77.1% for the twelve months. While the median global bond portfolio pushed ahead by 1.9% in the last three months, lower than its domestic counterpart, it gained 15.3% in the year, significantly higher than the median US bond portfolio.
Meanwhile, core fixed income portfolios had median returns of 2.7% for the January to March period and 5.9% for the twelve-month period. That was at the same time that the median high yield portfolio underperformed core bonds in the first quarter with a return of 2.1%. For the twelve months ended March 31, however, the median high yield portfolio bulled ahead by 17.5%. The median bond exposure among plans in the universe was 30.9% at the end of the first quarter. The duration of the median U.S. bond portfolio stood at 3.9 years, modestly lower than the median 4.1 years’ duration in December 2003.
Although all styles of domestic equity investing had positive results, there was a 5.8% difference between the returns achieved by the most and the least successful strategies. The median small cap value portfolio return was 7.2%, while the median large cap growth portfolio earned 1.4%. In the first quarter, as in the prior quarter, the median value portfolio outperformed the median growth portfolio in each market capitalization class.
The universe includes over 18,600 portfolios in all asset classes, with an aggregate market value of $1.6 trillion. The portfolios are sponsored by approximately 1,400 organizations.
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