US pension funds have shown their worst performance since the beginning of the COVID pandemic. According to data firm Investment Metrics, pension funds have shown a median loss of 5% over the first quarter.

This was the first time pension funds lost money since the first quarter of 2020, when pension funds had a median loss of 12%. Before that, pension funds has seen negative returns in the last quarter of 2018 and the first quarter of 2015. However over the last five years, they have managed to offer a median return of more than 8%.

Corporate sponsored plans performed the worst, with a median loss of 7.25%, nearly 3% lower than the average for other plan types, such as trust funds, public plans, Taft-Harley funds, endowments, and foundations. However all plans posted negative returns for the first quarter.

Corporate plans suffered mostly due to positions in fixed income investments, especially long-dated US bonds. The Barclays Long Bond Index was down more than 10% in the first three months of 2022. Whereas the S%P 500 was only down 5%.

Although that may have hurt corporate plans in the first quarter, they may end up being protected in the second quarter, as the S&P 500 dropped 12% since the end of March, and the small-cap Russell 2000 index dropped 13%. By contrast the Bloomberg-Barclays US Aggregate Bond Index only dropped 3%. As investors flee stocks, they head to bonds, making the more conservative fixed-income investment strategy advantageous.