Ibbotson Associates, a subsidiary of Morningstar, released a report on Tuesday that found equity markets rebounded in third-quarter 2010. The Ibbotson Target Maturity Report found the average target maturity fund returned roughly 10% — lower than the S&P 500 Index, but "significantly above" the BarCap U.S. Aggregate Bond Index of 2.5%. The Morningstar Lifetime Moderate Index family performed even better, with a 10.8% return.
The report noted that the strength seen in the third quarter is especially welcome, as second-quarter performance fell more than 7% on average. The average target maturity fund had a year-to-date return of 9.2%, while the Morningstar Lifetime Moderate Index returned 9.2%.
"The second quarter of 2010 was the first in five quarters in which asset classes experienced negative returns, but the third quarter saw a return to positive performance," according to the report.
Emerging market equities returned 18.2% for the third quarter. Foreign equities also performed well, returning 16.5%. Large growth equities returned 13%, followed closely by small growth equities at 12.8%. Value equities' returns were slightly lower; large value equities returned just over 10% and small value returned 9.7%. Real estate and commodities were also top performers at 12.8% and 11.6%, respectively.