Human Resources: Institutional plans post positive third quarter returns

New York, November 15, 2006
The median corporate, public, and foundation/endowment plan experienced
positive results for the third quarter of 2006, finds a quarterly survey
of plan sponsor performance by Mercer Investment Consulting, Inc.
(Mercer IC).
According to Mercer IC's Summary Performance of US Institutional
Portfolios survey, the median corporate plan had a third-quarter gain of
3.9%. Public plans and foundation/endowment funds gained 3.9% and 3.5%,
respectively.
On a one-year basis, corporate plans had average gains of 9.7%, while
public plans and foundation/endowment plans earned 10.4% and 10.0%,
respectively. Over a 10-year time frame, all three plan types have
averaged between 8.8% and 9.7% on an annualized basis.
Equity performance
According to Mercer IC's analysis, both value and growth managers
produced positive results during the third quarter, with the median
large-cap value manager outperforming its growth-oriented counterparts
by 240 basis points. The median large-cap manager underperformed the S&P
500(r) Index for the third quarter by 60 basis points, but outperformed
the index by 120 basis points on an annualized basis over the last 10
years. Small-cap managers underperformed their large-cap counterparts by
550 basis points over the current quarter. The median small-cap manager
lost 0.4% while the median large-cap manager gained 5.1%.
The international equity asset class, as represented by the MSCI EAFE(r)
Index gained 3.9%, underperforming its US large-cap counterpart for the
quarter by a margin of 180 basis points, but outperforming on a one-year
basis by 840 basis points. Local stock market returns were positive for
the quarter; however the US dollar strengthened and partially offsetting
positive local returns in most markets.
Within the international asset class, the value style benchmark
outperformed growth by 250 basis points, and the median value manager
outperformed their growth counterparts by 180 basis points apart.
Fixed income performance
Within the fixed income asset class, the median core fixed income
manager equaled the Lehman Brothers Aggregate(tm) Index in the third
quarter and outperformed the index on a one-year basis by 30 basis
points. Over a 10-year period, the median manager has outperformed the
index by 30 basis points.
Core opportunistic managers equaled the performance of the Lehman
Brothers Index during the quarter and outperformed the index by 40 basis
points on a one-year basis. The median high-yield manager posted a 3.6%
return for the quarter.
In assessing international fixed income performance, the median non-US
manager had a quarterly gain of 0.9% while the median global manager
gained 1.4%. Over a 10-year period, the median managers in both
universes outperformed their respective benchmarks.
About the survey
Summary Performance of US Institutional Portfolios is published
quarterly by Mercer Investment Consulting, Inc. The survey is intended
to provide marketplace participants with summarized performance data for
the most recent quarter and historical periods. Summarized information
is shown for plan sponsors at the total plan level while manager
performance data are provided at the asset class and sub-asset class
level. Fund universes are courtesy of Mellon Analytical Solutions.
Manager universes are courtesy of Mercer IC's proprietary manager
database.
Summary Performance of US Institutional Portfolios may be downloaded
free of charge from www.mercerIC.us. Please note: All performance is
measured in US dollars, before investment management fees are deducted.
Mercer Investment Consulting is a leading global provider of investment
consulting services, and offers customized guidance at every stage of
the investment decision, risk management, and investment monitoring
process. It has been dedicated to meeting the needs of clients for more
than 30 years, and works with the fiduciaries of pension funds,
foundations, endowments and other investors in some 35 countries.
Mercer Investment Consulting is a unit of Mercer Human Resource
Consulting, an operating company of Marsh & McLennan Companies, Inc.
(MMC). MMC lists its stock (ticker symbol: MMC) on the New York,
Chicago, Pacific and London stock exchanges.

Visit Mercer IC online: mercerIC.us

Charles Salmans
Principal
Global Public Relations
Mercer
1166 Avenue of the Americas
New York, NY 10036
USA

phone: +1 212 345 4512
mobile: 1 203 536 1271
fax: +1 212 345 1153

#charles.salmans[at]mercer.com
www.mercerHR.com