Wilshire Trust Universe Comparison Service® Reports Solid Plan Gains Third Quarter, One-Year Returns Pull Back Slightly

Institutional assets tracked by Wilshire Trust Universe Comparison Service (Wilshire TUCS) posted an all-plan median return for third quarter and the one-year ending September 30 of 2.63 and 6.90 percent, respectively. Wilshire TUCS, a cooperative effort between Wilshire Analytics, the investment technology foundation of Wilshire Associates Incorporated (Wilshire), and custodial organizations, is widely considered the definitive benchmark for U.S. institutional plan assets performance and allocation.

Third quarter built on second quarters slight rebound from a negative first quarter, one in which all plans posted median losses for the first time in nearly three years. Combined performance across both second and third quarter pulled the September 30 one-year down to 6.90 from 7.50 percent for the June 30 one-year return.

Despite headwinds in bonds due to a significant rise in interest rates late third quarter, exposure to U.S. equities clearly helped support plan performance, said Jason Schwarz, president, Wilshire Analytics and Wilshire Funds Management. The recent mix of strong U.S. economic indicators and generally strong earnings results has continued to help drive U.S. equity returns higher, Schwarz noted.

U.S. equities, represented by the Wilshire 5000 Total Market Index„ , gained 7.27 and 17.60 percent third quarter and for the September 30 one-year, respectively; meanwhile, international equities, represented by the MSCI AC World ex U.S., rose 0.71 percent third quarter and posted a net gain of 1.76 percent for the year. U.S. bonds, as represented by the Wilshire Bond Index„ , also rose third quarter, up 0.48; however, bonds fell -0.73 percent for the year.

Quarterly median returns across plan types ranged from 1.92 to 3.09 percent for large corporate funds (assets above $1 billion) and Taft Hartley Defined Benefit Plans, respectively. One-year returns spanned low and high medians ranging from 3.79 to 8.70 percent for large corporate funds and large foundations and endowments (assets above $500 million), respectively.

The 60/40 portfolio outperformed all plan types, posting a 4.55 percent gain for the quarter, noted Schwarz. Medians were not only positive across the board once again, fueled primarily once again by exposure to U.S. equities, but all plan types also exceeded the quarters 1.8 percent target needed for a 7.5 percent annual gain, Schwarz added.

For both third quarter and the September 30 one-year, small outperformed large across all plan types due to greater U.S. equity exposure; meanwhile, large foundations and endowments reduced their significant alternatives exposure to 39.05 percent in third quarter.

Large plans (assets above $1 billion) posted median gains of 2.42 and 7.38 percent for the quarter and year ending September 30, respectively. Small plans (assets less than $1 billion), outperformed large for the quarter but fell just short for the year at 2.75 and 6.70 percent, respectively.

Data and charts in this article are copyrighted and owned by Wilshire Associates Incorporated.

About Wilshire Associates

Wilshire Associates, a leading global financial services firm, provides consulting services, analytics solutions and customized investment solutions to plan sponsors, investment managers and financial intermediaries. Its business units include, Wilshire Analytics, Wilshire Consulting, Wilshire Funds Management and Wilshire Private Markets. The firm was founded in 1972, providing revolutionary technology and acting as an early innovator in the application of investment analytics and research to investment managers in the institutional marketplace. Wilshire also is credited with helping to develop the field of quantitative investment analysis that uses mathematical tools to analyze market risks. All other business units evolved from Wilshires strong analytics foundation. Wilshire developed the Wilshire 5000 Total Market Index and became an early innovator in creating integrated asset/liability analysis/simulation models as well as practical models in risk budgeting through beta and active risk analysis. Wilshire has grown to a firm of approximately 275 employees serving the needs of investors around the world. Based in Santa Monica, California, Wilshire provides services to clients in more than 20 countries representing more than 500 organizations with assets totaling approximately US $9 trillion.* With ten offices worldwide, Wilshire Associates and its affiliates are dedicated to providing clients with the highest quality products and services. Wilshire and Wilshire 5000 are registered service marks of Wilshire Associates Incorporated. Wilshire 5000 Total Market Index„  is a service mark of Wilshire Associates Incorporated.

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*Client assets are as represented by Pensions & Investments (P&I), detailed in P&Is Largest Retirement Funds and P&Is Largest Money Managers (U.S. institutional tax-exempt assets) as of 9/30/17 and 12/31/17, and published 2/5/18 and 5/28/18, respectively.

Data and charts in this article are copyrighted and owned by Wilshire Associates Incorporated.

Wilshire Associates
Lisa Herbert, +1-310-899-5325
[email protected]