Q107 Institutional Plan PerformanceTrails Q406

May 30, 2007 (PLANSPONSOR.com) - The first quarter performance for corporate, public, and foundation/endowment pension plans fell below Q4 performance, according to Mercer Investment Consulting's Summary Performance of US Institutional Portfolios.

Corporate plans had a first-quarter gain of 2.1%, compared to the 5.7% gains made in Q4, and public plans and foundation/endowment funds both gained 2.5% during the quarter, compared to the 5.8% and 6.1% gains in the previous quarter, respectively (See  Institutional Plans Make Strides in 4Q06).

On a one-year basis, corporate plans had average gains of 10.9%, while public plans and foundation/endowment plans earned 11.8% and 11.6%, respectively. Over a 10-year timeframe, all three plan types have averaged between 9.0% and 9.8% on an annualized basis.

The Mercer survey showed that both value and growth managers produced positive results during the first quarter, with the median large cap growth manager outperforming its value-oriented counterparts by 50 basis points. With regard to the S&P 500, the median large cap manager outperformed the index by 60 basis points.

Small cap managers outperformed their large cap counterparts by 190 basis points over the current quarter, with the median small cap manager gaining 3.1% while the median large cap manager, 1.2%.

The international equity asset class – represented by the MSCI EAFEIndex – garnered 4.1%, outperforming its US large cap counterpart for the quarter by a margin of 350 basis points. Total returns were aided by positive local stock market returns and a weakening US dollar.

Within the fixed income asset class, the median core fixed income manager outperformed the Lehman Brothers Aggregate Index by 10 basis points in the first quarter, as in Q4, and outperformed the index on a one-year basis by 30 basis points. Core opportunistic managers outperformed the performance of the Lehman Brothers Aggregate Index by 20 basis points during the quarter and outperformed the index by 60 basis points on a one-year basis.

The median high-yield manager posted a 2.8% return for the quarter.

As far as international fixed income performance, the median non-US manager had a quarterly gain of 1.0% while the median global manager gained 1.2%.

The summary performance of US Institutional Portfolios   may be downloaded free of charge from www.mercerIC.us .