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Wilshire Trust Universe Comparison Service® Sees Modest Plan Gains Second Quarter, One-Year Returns Pull Back Slightly
[August 07, 2018]

Wilshire Trust Universe Comparison Service® Sees Modest Plan Gains Second Quarter, One-Year Returns Pull Back Slightly

Institutional assets tracked by Wilshire Trust Universe Comparison Service® (Wilshire TUCS®) posted an all-plan median return of 0.88 percent for second quarter and 7.50 percent for the year ending June 30. 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.

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Wilshire TUCS plan returns versus 60/40 for second quarter 2018 (Graphic: Business Wire)

Wilshire TUCS plan returns versus 60/40 for second quarter 2018 (Graphic: Business Wire)

Second quarter rebounded slightly from last quarter, which posted negative median returns for all plans for the first time in nearly three years. Combined performance across both quarters pulled the June 30 one-year down to 7.50 from 9.51 percent for the one-year March 31 return.

"Exposure to U.S equities clearly helped fuel plan performance second quarter," said Jason Schwarz, president, Wilshire Analytics and Wilshire Funds Management. "The recent mix of positive economic indicators and generally strong earnings results has helped drive equity returns higher," Schwarz noted.

U.S. equities, represented by the Wilshire 5000 Total Market Index?, gained 3.83 percent second quarter and posted a 14.66 percent gain for the June 30 one-year; meanwhile, international equities, represented by the MSCI AC World ex U.S., fell -2.61 percent second quarter with a net gain of 7.28 percent for the year. U.S. bonds, as represented by the Wilshire Bond Index?, also fell second quarter, posting -0.25 and -0.9 percent for the quarter and year, respectively.

Quarterly median returns across plan types ranged from 0.26 to 1.56 percent for large corporate funds (assets above $1 billion) and large foundations and endowments (assets above $500 million), respectively. One-year returns spanned low and high medians from the same, ranging from 4.64 to 10.03 percent for large corporate funds and large foundations and endowments, respectively.

"The 60/40 portfolio outperformed all plan types, posting a 2.20 percent gain for the quarter," noted Schwarz. "While all plans types fell short of the quarter's 1.8 percent target needed for a 7.5 percent annual return, medians were positive across the board due mostly to U.S. equity exposure," Schwarz added.

For both the quarter and June 30 one-year, small outperformed large corporate funds due to greater U.S. equity exposure. Meanwhile, large foundations and endowments increased their already significant alternatives exposure in second quarter to 42.05 percent; this, combined with a heavy exposure to U.S. public equity, helped large outperform small foundations and endowments for both the quarter and year.

Large plans (assets above $1 billion) posted median gains of 0.63 and 8.04 percent for the quarter and year ending June 30, respectively. Small plans (assets less than $1 billion), outperformed large for the quarter but fell just short for the year at 1.04 and 7.28 percent, respectively.

* Median allocations will not add up to 100 percent. No part of the chart may be re-produced.

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 Wilshire's 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&I's "Largest Retirement Funds" and P&I's "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.

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