Most U.S. institutional investment plan sponsors posted slight losses for the first quarter of 2005, according to data in the Northern Trust Universe.
The Northern Trust Universe represents the performance results of over 300 large institutional investment plans that subscribe to Northern Trust performance measurement services. These plans, with a combined asset value of $390 billion, represent a broad snapshot of overall institutional investment plan performance.
“Most U.S. institutional plans lost ground in the quarter, reflecting the lack of traction in the first quarter capital markets,” said Joe Nardulli, Product Manager, Northern Trust Investment Analytical Services. “Virtually all ERISA plans and public funds struggled with median investment performance losses of 1.0% and 0.9% respectively. About a quarter of foundation and endowment plans managed to post modest gains, but the median plan was down 0.3%.”
“This was a pretty erratic quarter as February gains offset January losses, only to slide again in March, resulting in the down quarter,” added Nardulli. “The US equity portion of virtually all plans posted negative performance in a quarter where most style managers struggled versus the style indexes.”
This quarter’s results eroded longer period performance gains for all plan types. Over a one year period, ERISA plans returned 7.4% at the median, public fund plans returned 7.7%, and foundation and endowment plans returned 7.9%. The median ERISA plan returned 7.0% over three years and 2.8% over five years. Over the same three and five year period, public fund plans returned 8.0% and 3.3%, and foundation and endowment plans returned 8.0% and 3.0%.
“Many plans experienced small gains from their international equity exposures but with little positive impact on total plan performance given most plans have small strategic allocations,” said Nardulli. “Plans having large allocations to private equity, such as in the foundation and endowment market, received a boost from private equity valuation gains posted this quarter.”