SANTA MONICA, Calif.--(BUSINESS WIRE)--Institutional assets tracked by Wilshire Trust Universe Comparison Service® (Wilshire TUCS®) posted all-plan median returns of -7.05 and -4.05 percent for fourth quarter and the year ending December 31, 2018, 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.
A weak first half of the year combined with dismal fourth quarter performance, the worst since third quarter 2011 fell -8.53 percent translated to the worst year since the 2008 Financial Crisis, when plans fell -24.79 percent.
“Equity exposure weighed on plan performance in the fourth quarter, as geopolitical concerns, earnings revisions, and higher interests rates led to a deterioration in investor sentiment,” said Jason Schwarz, president, Wilshire Analytics and Wilshire Funds Management.
U.S. equities, represented by the Wilshire 5000 Total Market Index℠, fell -14.29 and -5.27 percent fourth quarter and for the year, respectively; and, international equities, represented by the MSCI AC World ex U.S., also fell -11.46 and -14.20 percent fourth quarter and for the year, respectively. U.S. bonds, represented by the Wilshire Bond Index℠, increased slightly fourth quarter with a gain of 0.86 but fell -0.76 percent for the quarter and year, respectively.
Median ranges across plan types for the quarter spanned losses from -7.61 to -4.59 percent for Taft Hartley defined benefit and large corporate (assets above $1 billion) plans, respectively. One-year medians ranged from a -4.48 percent loss to 0.88 percent gain for foundations and endowments, and for large foundations and endowments (assets above $500 million), respectively.
For the quarter, all plan types except small public plans outperformed the 60/40 portfolio, which lost -8.23 fourth quarter.
In 2018, both large public plans and foundations and endowments outperformed the 60/40 portfolio, which lost -3.47 percent. For both the quarter and year, large plans outperformed small across all types due to greater non-equity exposure, while large foundations and endowments continued significant alternatives exposure fourth quarter with a median 39.84 percent.
Large plans (assets above $1 billion) posted median losses of -5.56 and -2.90 percent for the quarter and year ending December 31, respectively; meanwhile, small plans (assets less than $1 billion), underperformed large for the quarter and year at -7.61 and -4.46 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 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 270 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.
