Investing August 25, 2003

STC: DC Plan Small Caps In Control in Q2

August 25, 2003 (PLANSPONSOR.com) - Small-cap equity offerings were king of the hill among defined contribution plan core option mutual funds during the second quarter of 2003 with a boffo 21.46% return.
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According to the Security Trust Company (STC) Quarterly Defined Contribution Investment Returns Index, the small-cap equity funds’ April to June performance represented a dramatic turnaround from its negative 4.97% first-quarter showing. Following on the heels of the small-cap equity funds were value offerings, which bulled ahead by a strong 17.82% in the second quarter, while mid-cap equities trailed by a hair at 17.78% over the quarter.

Rounding out STC’s core option list were:

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  • Growth, 16.99%
  • Foreign Equity, 16.51%
  • Large-Cap, 15.86%
  • Blend, 14.08%

Money Market/Stable Value and Bond funds were way behind at 0.81% and 3.21% respectively.

For the year, Small-Cap equity likewise led the way at 15.42%, followed by Growth (14.36%), Mid-Cap (13.87%), Large-Cap (11.54%), Blend (11.44%), Value (10.44%), Foreign Equity (8.91%), Bond (5.34%), and Money Market/Stable Value (1.53%).

According to the STC data, Individual Directed Brokerage Accounts (IDA) had a 10.6% second-quarter return and 7.12% over the year, while separately managed accounts (SMA)   turned in a 10.17% second-quarter performance and 7.69% for the year.

For the broader industry yardsticks, the NASD Composite showed a 21.11% return for the second quarter, the S&P 500 raced ahead by 15.39% and the Dow Jones Industrial Average was at 13.11%.

The STC Index compares the return on investments in Core Mutual Fund Accounts, SMAs, and IDAs for the second quarter of 2003 to previous annualized returns.  The sampling for the first quarter index consists of 2,345 plans serviced by STC, totaling approximately $9.5 billion in assets.  The 2,345 plans include 3,771 IDAs and 234 separately managed accounts.

STC reported earlier this year that the first-quarter data showed positive investment returns for every category (See  STC: DC Investments Start 2003 on Upswing). 

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