Institutional investors gained on average a little more than 3% in the second quarter, data from Wilshire Associates and Northern Trust show.
Plans in the Wilshire Trust Universe Comparison Service posted median returns of 3.2% and 6.5% for the second quarter and year ended June 30, respectively.
"For the one year ending in June of 2019, market volatility and active management worked against all plan types," said Jason A. Schwarz, president, Wilshire Analytics and Wilshire Funds Management, in a news release. "Changes in investor and economic sentiment over the past year resulted in unforeseen outcomes for many active managers. In general, deviations from benchmark exposure were unchallenged, particularly in fixed income, as yields tumbled and pushed the price of U.S. Treasuries materially higher."
Corporate defined benefit plans posted the highest median quarterly return in Wilshire's universe, at 3.41%, followed by Taft-Hartley pension plans, at 3.36%; foundations and endowments, 3.29%; public pension plans; 3.21%; and Taft-Hartley health and welfare funds, 2.94%.
By asset class, the MSCI World ACWI ex-U.S. Equity index posted quarterly and one-year returns of 2.98% and 1.29%, respectively. The Wilshire 5000 Total Market index, meanwhile, returned 3.99% and 9.09%, over those periods, respectively, and the Wilshire Bond index, 3.57% and 9.19%.
Longer term, for the three, five and 10 years ended June 30, the TUCS universe returned a median annualized 8.39%, 5.76% and 9.07%, respectively.
Meanwhile, data from the Northern Trust universe show the median plan returned about 3.1% for the quarter ended June 30.
"Despite some volatility, solid performance across equity and bond markets drove positive results for institutional plan sponsors in the second quarter," said Mark Bovier, regional head of investment risk and analytical services at Northern Trust, in a separate release. "U.S. stocks sold off sharply in May but ended the quarter close to all-time highs, and the median U.S. equity program in the Northern Trust universe had a 4.1% return for the quarter. The median international equity program return was 3%, and bond markets contributed as well, with the median U.S. fixed-income program up 2.9% for the quarter."
The median public pension fund gained 3.1% in the second quarter, while corporate DB plans returned 3.2%, and foundations and endowments, gained 2.7%.
Corporate DB plans returned 8.5%, 8.6% and 6.3% for the one, three and five years ended June 30, respectively. Public pension plans' one-, three- and five-year returns were 5.8%, 9.1% and 6.1%, respectively. Foundations and endowments returned 5.2%, 8.9% and 5.7% for the one, three and five years ended June 30.
