The average 2009 return for study participants' defined benefit pension plans was 21.5%, compared with last year's return of -26.3%. Returns on defined benefits plan assets averaged -.8% for the previous three years and 3.9% for the previous five years.
"FY2009's results represented welcome and much-needed relief after the dismal FY2008," said John S. Griswold, executive director of the Wilton, CT-based Commonfund Institute. "Still, the fact remains that the average return of 18.8% was not enough to move trailing three-year returns into positive territory and the average 3.5% return for the five-year period is well short of covering healthcare organizations' spending and investment and costs, plus the added impact of inflation."
Based on asset class, international equities provided the strongest return, an average of 37.3% for study participants. Returns for other asset classes were: domestic equities, 31.2%; fixed income, 11.7%; alternative strategies, 17%; and short-term securities/cash, 1%.
The negative returns came from subcategories of the alternative strategies allocation. Private equity real estate fell -25.8%; venture capital, fell -10.5%; and private equity fell -7.2%.
Other alternative strategies allocations were very strong, however, as commodities and managed futures produced a 32% return, energy and natural resources returned 28.2%, and distressed debt returned 20.8%.