GLOBAL - Equity markets across the globe posted gains in the third quarter of 2005, according to Mercer Investment Consulting's Defined Contribution Universe Summary.
Among the most noteworthy findings, the S&P500 Index rose 3.6%, while the fixed income asset class turned in a negative quarter as the Lehman Aggregate posted a loss of 0.7%.
Money market instruments gained 0.8% while the balanced asset class, using a benchmark of 60% S&P 500/40% Lehman Aggregate, posted a gain of 1.9%. International equity markets posted a gain of 10.4% for the quarter.
According to the survey findings, the international equity asset class outperformed US equities for the quarter by 6.8%, and by a margin of 630 basis points on a year-to-date basis.
Meanwhile, global equities gained 7.0% for the quarter but underperformed international equities by 340 basis points. Capital market returns remain solidly positive over the long term, aided by positive one-year results in all equity asset classes.
Over a 10-year time frame, the S&P500 Index returned 9.5% while the Russell 2000 Index returned 9.4%. International equity markets produced a smaller gain of 5.8% over a 10-year time frame, lagging behind their US counterparts.
Over a 10-year period, the fixed income asset class produced a return of 6.5%, below US equity returns over the same time period but with significantly less risk.
This week's edition of Professional Pensions is out now.
Nearly 60% of UK employers consider defined contribution (DC) master trusts to be the "most suitable" pension fund for their employees, according to research by Buck.
Companies which have tried to dodge their pension duties by changing their identities are being "hunted" by The Pensions Regulator (TPR) in a crackdown on non-compliance with auto-enrolment (AE).
Removing liquidity restrictions would enable DC funds to capitalise on the potentially higher and safer returns that DB schemes have benefitted from, says Patrick Marshall.