Double-digit median investment returns were reported in the third quarter by corporate and public pension funds, foundations and endowments, according to a Mercer report.
The median corporate plan gained 12.1% in the quarter; public plan, 11.7%; and foundation and endowment, 10.4%.
For the year ended Sept. 30, corporate plans returned a median 2.1%; public plans, 1%; and foundations and endowments, -1.5%. All three plan types have averaged between 4.6% and 4.8% for 10 years as of Sept. 30 on an annualized basis.
Among managers in Mercer's universe, large-cap value equities topped their growth counterparts in the third quarter, with a median 16.5% vs. 14.1%. The median large-cap core manager returned 15.3% for the quarter, underperforming the S&P 500 index by 30 basis points, while the median small-cap core manager returned 18.8%.
International equity managers in Mercer's universe were up a median 19% for core, 19.3% for value and 18.1% for growth in the quarter ended Sept. 30. For the year ended Sept. 30 Core returned a median 3.7%; value, 5%; and growth, 2.9%. Annualized over 10 years, core's median return was 4.4%; value, 7.4%; and growth, 4.4%.
The median U.S. REIT manager returned 32.2% for the quarter while global REITs returned a median 24.5%. U.S. REITs returned an annualized median -25.8% for the year and 11.1% for the 10 years, both ended Sept. 30.
Core fixed-income managers returned a median 5.3% for the quarter, an annualized 13% for the year and an annualized 6.6% for the 10 years, all ended Sept. 30.
Andrew Kramer, a principal and head of marketing with Mercer, said in an interview that while markets have been strong, the overall economy remains fairly weak.
“We've had a strong snapback in the markets; whether that continues into 2010 remains to be seen,” he said.