More than three-quarters, 77%, of large pension funds invested at least half of their emerging market equities actively, based on available responses to Pensions & Investments’ annual top 1,000 retirement plan sponsor survey.
Nearly half of the pension funds had their entire emerging market equity assets invested actively.
Most active separate account composites didn’t match the MSCI Emerging Markets index’s 14.8% return over the past year, according to data provided by Morningstar Direct. The separate accounts had a median one-year return of 13.2% based on 111 composites.
The five- and 10-year median returns were 5%, besting the index’s 3.2% and 3.8%, respectively. However, there were fewer separate account composites for the longer periods (103 and 89, respectively), indicating survivorship bias may be a factor.
