Corporate defined benefit plans had the highest returns of funds in the Northern Trust universe in 2014, a positive year for all asset owners, the company announced Monday.
In the year ended Dec. 31, corporate DB plans had a median return of 8.5%, public DB plans returned a median 6.8%, and foundations and endowments returned a median 5.9%.
Overall, the gains were a median 7% for the year, about half of the overall median return in 2013. In 2013, public DB plans returned a median 16.1%; foundations and endowments, 15.2%; and corporate DB plans, 12.6%.
For the fourth quarter, following a third quarter that saw slightly negative returns for all types of funds, corporate pension funds returned a median 2.4%; public pension funds, 1.3%; and foundations and endowments, 1%.
For the fourth quarter, corporate DB plans were assisted by larger allocations to domestic fixed income and domestic equity, at a median 39% and 29%, respectively, while public DB plans were also supported by a larger domestic equity allocation of 34%. Those public DB plans were, however, slightly hurt by a larger median 23% allocation to international equity.
Foundations and endowments, meanwhile, finished at the bottom for the quarter due in part to large median allocations to private equity and international equity at 24% and 12%, respectively.
The Northern Trust universe consists of about 300 large U.S. asset owners with combined assets of about $899 billion.
