Barry Burr's July 21 Editorial Page column, "Corporate pension fund performance," betrays a surprising lack of sophistication for a publication that considers itself "The International Newspaper of Money Management."
First, the benchmark premise is flawed; second, the methodology is incomplete; and last, the performance numbers are wrong.
It is unheard of for a large global portfolio to use only domestic indexes when benchmarking performance.
Time-weighted investment returns can not be accurately computed without cash flow data.
GTE's pension fund performance was understated by a significant amount. It also outperformed the erroneous domestic-only benchmark used in the "study."
Perhaps more time should be spent in thoughtful analysis before jumping to conclusions.
John B. Carroll
GTE Investment Management Corp.