The monthly report indicated equity values declined slightly in August, while interest rates resumed their upward trend. The resulting asset and liability changes essentially balanced out, and the Towers Watson Pension Index dropped 0.3% for the month, to 72.8. Despite this slight decline, the index remains up nearly 17% for the year.
The equity portfolio returned -2.7% in August but remains up more than 15% for the year. Fixed-income returns have been driven into the red by rising yields and are deep in negative territory for the year.
The Towers Watson Pension Index tracks the performance of a hypothetical pension plan invested in a 60% equity/40% fixed-income portfolio. That portfolio recorded a -1.8% return for August. Towers Watson also tracks two alternative investment portfolios with different mixes of equity/fixed income. Monthly returns on the 20% and 60% fixed-income portfolios were -2.2% and -1.3%, respectively.