US instos swing back to equities

The Conference Board’s 2010 Institutional Investment Report: Trends in Asset Allocation and Portfolio Composition measures the asset growth and portfolio composition of institutional investors operating in the US.

At the end of 2009, pension funds were still the leading category in the institutional landscape, holding 39.9 per cent of total institutional assets.

The report found that institutional assets have recorded a swing back to equities, resuming the decade-long trend of preferring equity to bond instruments. Over the past decade, the Conference Board has reported that equities allocations of pension funds  has increased from 35.1 to 41.3 per cent.

According to the report, which has been providing analysis on this market for the past decade, equities remain the choice for state and local pension funds; but alternative instruments, including real estate, private equity, hedge funds and cash equivalents, are at the highest level seen by the industry to date. At the end of 2009 they reached as much as 27.9 per cent.

The report found that there were capital injections and a renewed flow of investments into hedge funds in 2009.

“Fueled by the liquid nature of hedge funds and the outstanding performance of some alternative investment strategies during the market rally that followed the crisis, year-end assets under management were valued at more than $1.6 trillion, which represented a 13.7 per cent increase over the 2008 level.

The Conference Board is a global, independent membership organisation conducting research, convening conferences and publishing information and analysis.

For the full report, click here