Value Trumps Growth in Q3
A Mercer study found value funds outperformed growth funds in the third quarter, as the median large-cap value fund posted a gain of 16.3% compared to a gain of 13.8% for the median large-cap growth fund.
Mercer’s third-quarter 2009 Defined Contribution Universe Summary indicated that the small-cap segment of the market trended in the same direction as large-cap stocks, as the median small-cap value fund outperformed the median small-cap growth fund by 430 basis points.
The median large-cap fund underperformed the S&P 500 Index by 60 basis points for the third quarter, Mercer indicated. Small-cap funds outperformed their large-cap counterparts for the quarter, as the median small-cap fund gained 18.2% for the quarter versus a gain of 15% for the median large-cap fund.
Within the international equity asset class, the median manager underperformed the MSCI EAFE Index by 80 basis points during the quarter. The median emerging markets manager gained 21.5% for the quarter and slightly outperformed the MSCI Emerging Markets Free Index by 50 basis points.
The median core fixed-income fund outperformed the Barclays Capital Aggregate index for the third quarter by 140 basis points.
Meanwhile, Mercer said there were gains in all equity markets during the period.
The S&P 500 Index gained 15.6% during the quarter while the Barclays Capital Aggregate Bond Index posted a gain of 3.7%. Money market instruments had a zero return, as measured by the three-month Treasury-bill rate.
The balanced asset class, using a benchmark of 60% S&P 500/40% Barclays Capital Aggregate Bond Indices, posted a gain of 10.8%. International equity markets, as measured by the MSCI EAFE Index, gained 19.5% during the third quarter.
Mercer said the international equity asset class outperformed U.S. equities for the quarter by 390 basis points. Global equities gained 17.4% for the quarter and underperformed international equities by 210 basis points.
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