Institutional Returns for 3Q07 Half that of 2Q07

December 4, 2007 ( - Institutional investors generally saw third quarter returns of approximately half of what they were in the second quarter of 2007, according to the Wilshire Trust Universe Comparison Service (TUCS).

According to a press release, the median return of all master trusts for the year ended September 30, 2007 was 14.29% with a third quarter return of 2.01%. The median performance of corporate pension plans was 2.04% for the quarter and 14.21% for the year while public pension funds’ median return was 2.16% for the quarter and 14.16% for the year.

The third quarter performance for foundations and endowments was 2.06% and 16.59% for the year, Wilshire TUCS data showed. Taft Hartley funds posted a median return of 1.93% for the quarter and 12.50% for the year, while non-profits saw a median performance of 2.06% in the third quarter and 15.76% for the past 12 months.

According to Wilshire TUCS, corporate funds showed an asset allocation of 63.06% in equities, 28.63% in bonds, and 2.24% in cash, and public funds 60.9%, 27.2%, and 2.28% of assets in these asset classes, respectively, and .19% in real estate.

Foundations and endowments held 59.78% in equities, 18.25% in bonds, 2.32% in cash, and .01% in real estate. Taft Hartley funds showed an asset allocation of 51.89%, 33.87%, 2.19%, and 4.28% in these classes, respectively.

The asset allocation for non-profit funds was 62.32% equities, 22.05% bonds, and 2.19% cash.

“[T]he largest plans have a greater allocation to the non-traditional asset classes which have outperformed the traditional asset classes recently.  Additionally, the asset class returns are higher for the large funds, indicating superior manager selection and the positive effects of manager diversification within the asset class,” said Hilarie C. Green, CFA, managing director and head of Wilshire Analytics’ Performance Reporting division, in the release.