Index managers are holding steady despite the market downturn, according to Pensions & Investments' biannual survey of managers of indexed assets.
Total worldwide assets under internal indexed management reached $5.65 trillion as of Dec. 31, a 1.1% increase from $5.59 trillion reported as of June 30. When adjusted for the market, total worldwide indexed assets fell 0.4%.
During the six-month period, the Russell 3000 returned -1.84%; the Lehman Brothers U.S. Government/Credit Bond index returned 6.2%; the Morgan Stanley Capital International Europe Australasia Far East index returned 0.48%; and the Citigroup Non-U.S. World Government Bond index returned 12.32%.
Barclays Global Investors, San Francisco, reported $1.93 trillion in total worldwide indexed assets, a 2.3% market-adjusted increase from $1.85 trillion as of June 30.
When comparing asset classes, BGI reported a market-adjusted gain of 3.3% in international equity, to $695.5 billion as of Dec. 31 compared with $670.3 billion as of June 30.
Domestic equity, however, fell a market-adjusted 3.1% in the same period, to $651.7 billion as of Dec. 31, from $684.9 billion as of June 30.
“We have seen a pretty consistent reallocation with our clients away from U.S. equity to international equity, both in the EAFE space and the emerging markets space,” said Amy Schioldager, head of U.S. indexing at BGI.
Part of the dip in domestic equity might be due to plan executives pulling money from domestic equity index accounts to make benefit payments.
“In many cases, we see plan sponsors make those payments with their U.S. equity index allocations,” said Ms. Schioldager.