Defined Benefit Plans Returned 4.47% in the First Quarter

Asset owners had strong Q1 2024 returns, primarily boosted by equities, according to Confluence’s investment metric plan universe report. The investment metrics plan universe is an analytical tool which sources data from 4,000 asset managers and asset owners.

Confluence is a technology solutions company, which provides services such as data-driven analytics to compliance and regulatory solutions for firms in the investment management industry.

According to Confluence, its tracker of the defined benefit plan universe returned 4.47% in the first quarter. Of the asset owners in this tracker, endowments and foundations outperformed a 60/40 portfolio, which returned 4.63%.

Endowments and foundations were the highest returning of all the types of asset owners in the plan universe; these institutions returned roughly 5% in the first quarter and a median 14.54% for the year ended March 2024.

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In the first quarter, corporate DB plans had the highest returns, at just under 8%. Public DB plans returned roughly 5%, Taft Hartley plans returned just over 5%, and health and welfare plans returned just over 2%

For the one-year period ending March 31, corporate DB plans returned roughly 8%, public DB plans returned just over 14%, Taft Hartley plans returned nearly 12%, and health and welfare plans returned just over 8%.

Equities were the primary driver of investments in the first quarter, the asset class returned just under 10% in the first quarter and 23.18% in the one-year period ending March 31. Returns for alternatives were flat in Q1 but brought in 7.39% over the past year. Real estate was the only asset class with negative returns, with slight negative returns in the first quarter and down 10% return over the past one-year period.