Foundations and Endowments See Negative Performance in 2011

The majority of institutional asset owners closed 2011 in positive territory, according to the Wilshire Trust Universe Comparison Service (Wilshire TUCS). 

The only plan category with a negative median annual return was Foundations and Endowments at -0.73%. Coming in at 4.64%, the category had one of the lowest median fourth-quarter returns. Foundations and Endowments with assets greater than $500 million had a one-year median return of 0.95% and a median quarterly return of 3.60%.

At 2.60%, Taft-Hartley Health and Welfare Funds had the lowest median fourth-quarter return. This can be attributed to their significant exposure to debt with a median allocation to U.S. bonds of 73.73%. On the other side of the scale, Taft-Hartley Defined Benefit Plans were rewarded with a top median fourth-quarter return of 5.94% for their 41.40% and 5.82% exposures to U.S. Equities and Real Estate, respectively. For the year, the plans saw a 0.86% median return.

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“The fourth quarter was one where large plan underperformance can be partially explained by the asset allocation difference between U.S. equities and non-U.S. equities,” said Robert J. Waid, managing director of Wilshire Analytics. “Large plans consistently had more equity exposure to non-U.S. equity and less exposure to U.S. equity than other categories in Wilshire TUCS. In a quarter where the Wilshire 5000 Total Market Index rose 12.02% and non-U.S. measures rose less than 4%, this allocation difference cost large plans,” he said.

For all master trusts included in Wilshire TUCS, the annual median return was 1.05%, while master trusts with greater than $1 billion in assets had a one-year median return of 1.61%. The largest plans with $5 billion or more tallied a median 12-month return of 1.45%.

Looking at public pension plans, those with assets of more than $5 billion and those with greater than $1 billion saw median fourth-quarter returns of 4.42% and 4.34%, respectively, and matching 2011 median returns at 0.86%. For the fourth quarter and the year, all public pension funds showed median returns of 5.31% and 1.02%, respectively.

Among corporate plans, the returns by all plans saw median performances of 5.64% for the quarter and 2% for the year. In the category that includes corporate plans with assets greater than $1 billion, the median quarterly and annual returns were 5.17% and 2.68%, respectively.

For more information about the Wilshire Trust Universe Comparison Service, e-mail TUCS@wilshire.com.

J.P. Morgan Asset Management Expands Strategy Group

J.P. Morgan Asset Management hired Roberts Grava as managing director in its Strategy Group. 

 

The Strategy Group, one of the company’s primary centers for research, is focused on investment policy issues of greatest concern to corporate, public and Taft-Hartley plans, endowments, foundations, sovereign wealth funds, central banks and insurance companies.

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In his new role, Grava will be primarily focused on expanding the company’s strategic dialogue with large sovereign wealth fund and central bank clients, and producing in-depth proprietary research and customized investment solutions. 

Grava rejoins the company from The World Bank, where he most recently served as head of Quantitative Strategies, Risk and Analytics, which provided advisory services for more than 40 central bank, national pension fund and sovereign wealth fund clients, and middle office support for global fixed income and multi-asset investment portfolios.

Grava spent 2007 to 2010 at J.P. Morgan Asset Management as a senior client portfolio manager in Fixed Income, prior to which he served as principal financial officer for The World Bank’s Treasury department, and was instrumental in the growth and development of their Reserve Advisory and Management Program (RAMP). Grava spent 11 years at Latvijas Banka (Bank of Latvia), where he was a member of the bank’s board and Chief Investment Officer.  

   

 

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