Institutional asset owners in the Northern Trust Universe returned a median 0.2% in the second quarter of 2015, down from 2.3% the previous quarter and 4% in the second quarter of 2014, data released Thursday show.
Among the various plan types, endowments and foundations posted the highest median return for the quarter at 0.5%, followed by public defined benefit plans at 0.4% and corporate DB plans, -1.6%.
For the year ended June 30, public pension funds had the highest median return at 3.3%, followed by endowments and foundations at 3.2%, and corporate plans, 2.8%.
The best-performing asset class for the quarter ended June 30 was private equity with a median return of 6%, followed by international equity with a median of about 5%; U.S. equity, 2.6%; hedge funds and real estate, 1.3% each; and fixed income, 0.2%, according to Northern Trust.
Endowments and foundations benefited from their higher allocations to private equity (median 24%) and hedge funds (median 22.5%), said Bill Frieske, vice president and senior investment performance consultant for Northern Trust’s investment risk and analytical services group, in a news release about the results.
Public DB plans were also supported by a large private equity allocation (median 6.3%) and international equity allocation (median 24.7%), while corporate DB plans were dragged down by a large allocation to U.S. fixed income, (median 36.5%), particularly long-duration bonds.
This quarter marks the first time in more than a year that corporate DB plans were not the top-performing plan type. Also noteworthy this quarter, all plan types were down at least 1.5 percentage points from the previous quarter.
“Second-quarter returns were significantly impacted by the uncertainty in Greece and the prospect of a Federal Reserve interest rate hike,” Mr. Frieske added in the news release.
The Northern Trust universe consists of about 300 large U.S. institutional plans with combined assets of about $899 billion.