Wilshire Trust Universe Comparison Service® Sees Soft Returns And Continues To Lag The 60/40 Portfolio

"Weak international returns contributed to a median plan return that underperformed the 60/40 portfolio in the second quarter and for the year ending June 30, 2016. The Wilshire 5000 Total Market Index^SM returned 2.78 percent in the second quarter and 2.96 percent for the year. The MSCI EAFE for international developed market equities lost -1.46 percent in the second quarter and -10.16 percent for the year," stated Robert J. Waid, managing director, Wilshire Associates. "Bond returns were solid with the Wilshire Bond Index gaining 3.24 percent in the second quarter and 6.82 percent for the year. This resulted in a tight range of median plan-type returns in the second quarter, with a low median return of 1.22 percent for Taft Hartley Health and Welfare Funds and a high median return of 2.64 percent for Corporate Funds with assets greater than $1 billion."  

"Except for large Corporate Funds, the spread for one-year returns was also tight with a low median return of -1.11 percent for Foundations and Endowments with assets greater than $500 million and a high median return of 3.36 percent for Corporate Funds with assets greater than $1 billion," Waid added.

"Though all plan-type categories had positive quarterly median returns, most categories experienced only small positive median returns for the year," Waid said.  "This was the fourth quarter in a row where the 60/40 portfolio beat the median plan return."

In the second quarter and for the year ending June 30, 2016, larger Corporate Funds outperformed smaller Corporate Funds, while smaller Public Funds and Foundations and Endowments outperformed their larger counterparts on both a quarterly and annual basis.  Large Foundations and Endowments continue to have a significant exposure to alternatives with a median exposure of 40.20 percent, which significantly contributes to the performance difference. All plan-types with assets greater than $1 billion had median returns of 2.02 percent in the second quarter and 1.51 percent for the year, compared to plans with assets less than $1 billion which had median returns of 1.85 percent in the second quarter and 0.73 for the year.

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About Wilshire Associates
Wilshire Associates, a leading global, independent investment consulting and services firm, provides consulting services, analytics solutions and customized investment products 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 the industry's integrated asset/liability analysis/simulation models as well as the industry's practical models in risk budgeting through beta and active risk analysis. Wilshire has grown to a firm of more than 300 employees serving the investment needs of institutional clients around the world.

Based in Santa Monica, California, Wilshire serves in excess of 500 clients across 20 countries with combined assets exceeding $7 trillion*.   With ten offices worldwide, Wilshire Associates and its affiliates are dedicated to providing clients with the highest quality counsel, products and services. Wilshire^® and Trust Universe Comparison Service^®, TUCS^® are registered service marks of Wilshire Associates Incorporated.  Wilshire 5000 Total Market Index℠ and Wilshire US Small-Cap Index℠ are service marks of Wilshire Associates Incorporated. 

Website:  www.wilshire.com 
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*Client assets are as represented by Pensions and 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 9/30/15 and 12/31/15, and published 2/8/16 and 5/30/16, respectively).

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

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