Institutional Portfolios See Negative Results in Q109

June 1, 2009 ( - The median corporate, public and foundation/endowment plan experienced negative investment results for the first quarter of 2009 and for the year, according to Mercer's Summary Performance of US Institutional Portfolios survey.

A news release said the median corporate plan had a first-quarter loss of 6.5%, and public plans and foundation/endowment funds lost 6.2% and 5.6%, respectively. On a one-year basis ending March 31, 2009, corporate plans had losses of 26.2%, while public plans and foundation/endowment plans lost 27% and 26.6%, respectively.


According to Mercer’s analysis, the median large cap growth manager outperformed its value-oriented counterparts by 770 basis points during the period, and the median large cap core manager outperformed the S&P 500 Index during the first quarter by 90 basis points, the news release said. The median large cap core manager outperformed its small cap core counterpart by 350 basis points over the current quarter. The median large cap core manager lost 10.1% while the median small cap core manager lost 13.6%.

The international equity asset class, as represented by the MSCI EAFE Index, lost 13.9%, underperforming the S&P 500 Index, its U.S. large cap counterpart, for the quarter by a margin of 290 basis points. Local regional stock market returns were negative for all regions. Currency was a negative contributor within all regions as the dollar strengthened during the quarter, Mercer said.

Within the international asset class, the median growth manager outperformed its value counterpart by 290 basis points. Within the real estate asset class, the median global REIT manager lost 20.7% and outperformed the FTSE EPRA/NAREIT Global Index by 140 basis points. During the quarter the median US REIT manager lost 30.7% and slightly outperformed the performance of the FTSE US NAREIT index.

Fixed Income

Within the fixed income asset class, the median core fixed income manager outperformed the Barclays Capital US Aggregate Bond Index in the first quarter by 50 basis points. The median core opportunistic manager outperformed the performance of the Barclays Capital US Aggregate Bond Index during the quarter by 100 basis points. The median high yield manager posted a gain of 5.7% for the quarter.

In international fixed income, the median non-US and global managers had quarterly losses of 5.4% and 3.6%, respectively.  

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