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U.S. corporate pension plans dive into LDI

Recent data from performance analytics provider InvesmentMetrics show that among the 1,400 plans in its universe, corporate pension plans most aggressively altered their allocations. Between the end of 2013 and June 30, corporate pension plans, in aggregate, lowered their U.S. equity allocations by 7.1 percentage points while increasing their allocations to U.S. fixed income by 10 percentage points. The data echo trends over the period of corporate plans de-risking via insurance companies, liability-driven investing or combinations of the two.

Public pension plans, as well as endowments and foundations, also lowered their U.S. equity allocations, but to lesser degrees. Public funds, in contrast to their corporate peers, lowered their U.S. fixed-income allocations while increasing their investments in international equity and alternatives.

Over the period, the S&P 500 gained 11.2% on an annualized total return basis, while U.S. fixed income, as measured by the Bloomberg Barclays Aggregate Bond index, was up 2.4%; U.S. corporate debt was up 3.5% between the end of 2013 and June 30.