US funds lose 5% during second quarter
US- US pension funds, endowments and foundations have lost 5% in the second quarter of this year, reversing gains made during the first three months.
The latest research by the Independent Consultants Cooperative, a consortium of sixteen investment consultants, is based on portfolios worth a combined $665bn and owned by around 1,300 plan sponsors.
Figures published show the median fund lost 5.1% in the second quarter, opposed to a 0.9% gain during the first quarter, driving the year-to-date returns down by 4%.
For the year to June 30th, the median plan is down 4.9% although annualised three and five year returns remain positive at 0.7% and 5.7% respectively.
ICC says broad diversification has helped to cushion losses and keep them below the sharp decline in equity markets. The median US equity portfolio fell 12% in the second quarter in contrast to its fixed income counterpart which rose 3.1% over the same period.
Global bond portfolios appreciated strongly, returning a median 10.6%, reflecting depreciation of the dollar.
ICC’s figures show diverse returns according to asset category. For the first six months of the year, the median small cap value portfolio returned 8%, 27 points higher than the median large cap growth portfolio return of –19%.