Pension Indicator Updated for September 30, 2017

September 2017: Modest Improvements, and Go Tribe?

By: Mike Shebak, Sr. Managing Director, Hartland

The Detroit Tigers are my team.  They always have been, and always will be.  They stink right now.  Their rival, the Cleveland Indians, enter the post season as the odds-on favorite to win the World Series.

It should pain me more than it does to admit this, but I am pulling for the Cleveland Indians this postseason.  They deserve it.  The fans deserve it.  Most importantly, I need my poor co-author of Pension Indicator, and die-hard Tribe fan, Matt Klein, to be in good mental health this fall.

Despite earthquakes and hurricanes during September, risk assets performed well, and most pension investment portfolios would have experienced a positive return.  Interest rates moved higher and with it liability values fell, albeit slightly.  This combination of outcomes resulted in most plan funded statuses improving month-over-month.

Market Update 

U.S. equity markets extended their gains through September. The S&P 500 returned 2.1% during the month, while small caps as measured by the Russell 2000 advanced 6.2%, boosted by the Trump administration’s release of a tax reform framework.

Foreign developed equity markets as represented by the MSCI EAFE Index continued their advance in September, gaining 2.5%. The MSCI Emerging Markets Index, which has led the way this year with a 27.8% return, took a pause and declined 0.4%.

U.S. Treasury rates increased across the yield curve amid the Federal Reserve’s release, despite the geopolitical tensions and with inflation data rising slightly. The 10-year U.S. Treasury yield rose 21 basis points to 2.33% while the 30-year U.S. Treasury yield rose 13 basis points to 2.86%1. The Bloomberg Barclay’s Aggregate Index total return for September was -0.48% and +3.14% year-to-date.

1 Bloomberg

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Information provided in this article is general in nature, is provided for informational purposes only, and should not be construed as investment advice. Performance data represents past performance.  Past performance is not indicative of future results.

Year to Date Investment Mix 
Plan TypeAggressiveBalancedLDI LiteLDI
 Frozen (for several years) 4.9% 4.0% 4.0% 3.1%
 Recently Frozen 3.2% 2.4% 2.3% 1.5%
 Ongoing Traditional 1.6% 0.7% 0.6% -0.2%
 Cash Balance 4.6% 3.7% 3.6% 2.8%
Month-over-Month Investment Mix 
Plan TypeAggressiveBalancedLDI LiteLDI
 Frozen (for several years) 1.8% 1.4% 1.1% 0.5%
 Recently Frozen 1.9% 1.6% 1.2% 0.7%
 Ongoing Traditional 2.1% 1.7% 1.3% 0.8%
 Cash Balance 1.9% 1.5% 1.2% 0.6%
12-Month Change Investment Mix 
Plan TypeAggressiveBalancedLDI LiteLDI
 Frozen (for several years) 15.7% 13.2% 11.1% 7.7%
 Recently Frozen 16.4% 13.9% 11.7% 8.3%
 Ongoing Traditional


14.6% 12.4% 9.0%
 Cash Balance 16.1%


11.4% 8.0%