After institutional assets in all asset classes—including mutual funds, pension funds, insurance companies, savings institutions and foundations—fell an average of 21.3% in 2008, they rebounded by 14% in 2009 to $25.3 trillion, on par with where they were in 2005 and 2006, The Conference Board said Thursday.
“These findings document an extraordinary upward movement from the 21.3% plunge of 2008, albeit still far from the best performance of an industry that between 1995 and 2007 had experienced unprecedented growth of 23.3% on an annualized basis,” said Matteo Tonello, director of corporate governance research at The Conference Board and co-author of “The 2010 Institutional Investment Report.”
“Of course, the historical significance of this data should also be put in context with the new economic uncertainties and the added market volatility of the last few months,” Tonello added.
The report also found that while institutional investors shunned equities in 2008, their allocation preferences returned to equities last year. “By the end of the year, institutions invested 40.4% of their assets in equities and 38.6% in fixed income, with the remaining 21% invested in other asset classes,” said Stephan Rabimov, an economist and the other co-author of the report.
Investors withdrew $2.53 billion from mutual funds in 2009, or 31.1% of their 2007 asset value. By comparison, pension funds lost 17.9% of their 2007 asset value, and insurance companies experienced an 8.6% contraction.