State Street Corporation, the provider of financial services to institutional investors, announced that the median return of its universe of total plans rose 3.1% in the 4th Quarter and 19.4% for the year ended December 2009, rebounding from the 24.6% loss in 2008. The State Street Universe (SSU) consists of a diverse range of North American funds custodied at State Street and funds provided by the Independent Consultants Cooperative. It includes both the total plans of a wide range of plan sponsors and the individual funds that comprise each plan.
Plans smaller than $1 billion outperformed larger plans this year (19.8% vs. 17.6%). Endowments & Foundations had the highest returns for the year (up 21.3%) while Public Funds and Taft Hartley gained only 18.5% and 18.4%, respectively.
International Emerging Market Equity funds rebounded sharply in 2009, rising 77.0% after decreasing 51.1% in 2008. Other types of equity funds also performed strongly: International Developed Market Equity Funds rose 33.4% and US Equity Funds, 30.1%. Fixed income funds also did well in 2009: Global Fixed Income Funds were up 17.8% and US Fixed Income Funds gained 11.8%. Real Estate funds lost 28.8% in 2009, but were down only 1.5% in the 4th Quarter.
The returns evidenced by the State Street Universe mirror and reinforce the perception of a general market improvement, says William Pryor, senior vice president and head of State Street Investment Analytics. Whether that improvement will carry on or not into 2010 no one can predict, however, we are entering the year with positive momentum which is a distinguished difference from the market tone at the end of 2008.
D.C.