Institutional Plans Make Strides in 4Q06

February 21, 2007 ( - Mercer Investment Consulting's Summary Performance of US Institutional Portfolios survey found the median corporate plan had a fourth quarter2006 gain of 5.7%, while public plans and foundation/endowment funds gained 5.8% and 6.1%, respectively.

The fourth quarter performance surpassed the third quarter in all institutional categories (See   Institutional Plans Gain Almost 4% on Average in 3Q06).

For the year-to-date, corporate plans had average gains of 13.3%, public plans earned 14.3%, and foundation/endowment plans earned 14.4%, according to a Mercer IC press release.

Mercer IC data showed both value and growth managers produced positive results during the fourth quarter. The median large-cap value manager outperformed growth-oriented counterparts by 200 basis points. The median large-cap value manager equaled the S&P 500 Index for the fourth quarter, but outperformed the index by 130 basis points on an annual basis over the last 10 years.

Small-cap managers outperformed their large-cap counterparts by 140 basis points over the current quarter, the news release said. The median small-cap manager lost 8.1% and the median large-cap manager gained 6.7%.

The international equity asset class, represented by the MSCI EAFE Index, gained 10.4%, outperforming its US large-cap counterpart for the quarter by a margin of 370 basis points. Within the international asset class, the value style benchmark outperformed growth by 90 basis points, and the median value manager underperformed growth counterparts by 90 basis points.

Within the fixed income asset class, the median core fixed income manager outperformed the Lehman Brothers Aggregate Index by 10 basis points in the fourth quarter and outperformed the index on a one-year basis by 40 basis points, the Mercer IC survey showed. Core opportunistic managers outperformed the performance of the Lehman Brothers Index during the quarter and outperformed the index by 80 basis points on a one-year basis.

The median high-yield manager posted a 3.9% return for the quarter.

International fixed income performance data showed the median non-US manager had a quarterly gain of 2.4% while the median global manager gained 2.4%.