Research Publications Archive

Revving Pension Plans’ Funding Engines

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Many corporate defined benefit plans experienced significant funded status gains in recent years. Recent capital markets volatility, however, has set many plans a few steps back, re-focusing plan sponsors on both protecting long-term funded status gains and closing the asset-liability deficit. Given increased volatility in global equity markets, relatively high valuations in many market segments, and the late stages of the economic and credit cycles, optimizing the plan’s growth engine is more critical, and challenging, than ever. This publication provides a framework for how to do so in the context of the evolving market environment.

Global Equity Manager Performance: 2018

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In 2018, 52% of active global managers underperformed the MSCI World Index gross of fees, with the median manager underperforming by 20 basis points. This marked a reversal from active managers’ strong outperformance in 2017. This is a companion piece to the US and global ex US equity manager performance chart books already published.

Decades of Data: 1900–2018

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In over 40 different analyses and 100 charts, our annual report on the history of global markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. Given the stage of the economic cycle and a shifting paradigm in central bank policy, we incorporate a current market environment section this year. The appendix to this report shows year-by-year, cumulative, and average annual compound returns for as much as 119 years of market data for Australia, Japan, the UK, and the US. Emerging markets equity returns are also included in the appendix—with 30 years of history—in USD and local currency terms.

Global ex US Equity Manager Performance: 2018

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In 2018, 62.1% of active global ex US managers underperformed the MSCI EAFE Index gross of fees, with the median manager underperforming by 123 basis points. Since 2000, the median manager has now underperformed the index in just three calendar years, and 2018 marks the first year of underperformance since 2004. This is a companion piece to the US manager performance chart book already published.

US Mid- to Large-Cap Equity Manager Performance: 2018

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For the fifth straight year, the majority of active mid- to large-cap managers underperformed in 2018, with 61.1% underperforming (gross of fees) in 2018. The median manager underperformed the Russell 1000® Index by 136 basis points for the year. This chart book is our annual summary of the absolute and relative performance of managers that report to our database.