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The median public fund gained 1.4% in the 12 months ending June 30, ahead of foundations and endowments, which lost 0.4% at the median, but behind corporate ERISA plans, which gained 3.9% at the median. Public funds have a higher allocation to international equities than other segments in the Northern Trust Universe – 16.7% at the median, compared to 10.7% for Corporate ERISA and 7.8% for foundations and endowments – and international equities were the worst-performing major asset class in that period. The median international equity program lost 13.1% in the 12 months ending June 30. "Public funds have had large allocations to international equity for the last decade, and have in recent years experienced volatility in this asset class," Frieske said. "While U.S. equity is still the largest asset class in most Public funds, its share has dropped from 43% to 32% for the median plan in the last 10 years. Public funds have the smallest allocation to hedge funds of any segment in our universe, but its share has grown in the last decade from 2% to 9% at the median." The Northern Trust Universe represents the performance of about 300 large institutional investment plans, with a combined asset value of approximately $712 billion, which subscribe to Northern Trust performance measurement services.
The median public fund gained 1.4% in the 12 months ending June 30, ahead of foundations and endowments, which lost 0.4% at the median, but behind corporate ERISA plans, which gained 3.9% at the median. Public funds have a higher allocation to international equities than other segments in the Northern Trust Universe – 16.7% at the median, compared to 10.7% for Corporate ERISA and 7.8% for foundations and endowments – and international equities were the worst-performing major asset class in that period. The median international equity program lost 13.1% in the 12 months ending June 30.
"Public funds have had large allocations to international equity for the last decade, and have in recent years experienced volatility in this asset class," Frieske said. "While U.S. equity is still the largest asset class in most Public funds, its share has dropped from 43% to 32% for the median plan in the last 10 years. Public funds have the smallest allocation to hedge funds of any segment in our universe, but its share has grown in the last decade from 2% to 9% at the median."
The Northern Trust Universe represents the performance of about 300 large institutional investment plans, with a combined asset value of approximately $712 billion, which subscribe to Northern Trust performance measurement services.
Jay Polanskyeditors@plansponsor.com