Updated with correction
The median plan in the Northern Trust universe returned -1.5% in the second quarter, with negative domestic and international equity returns bringing down performance.
Corporate retirement plans were easily the biggest winners for one-, three- and five-year returns and the smallest loser for the quarter ended June 30, according to a news release from Northern Trust.
“It was really simplistic this time. If you had fixed income, you did good this time around,” said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytic Services, in a telephone interview. “Corporate plans did better because they had more fixed income.”
Corporate plans returned a median -0.8% in the second quarter, compared to -1.7% for public funds and -2% for foundations and endowments. The median U.S. equity portfolio in the Northern Trust universe was down 3.9% for the quarter after gaining 13% in the first quarter. International equity was down a median 7% while fixed income was up 2.3% and hedge funds were down 0.7%.
For the year ended June 30, corporate plans returned a median 3.9%, far outpacing public plans at 1.4%, and foundations and endowments at -0.4%. They are also tops for three- and five-year returns at an annualized 12.9% and 2.4%, respectively.
International equity has hurt public plans, which have a median 16.7% allocation compared to 10.7% for corporate plans and 7.8% for foundations and endowments. Mr. Frieske said international equity still seems like a good long-term idea for public funds searching for higher returns, but issues like the Greek debt crisis are causing “extreme gyrations” in the short-term.
The Northern Trust universe comprises about 300 large institutional plans with a combined $712 billion.
