Institutional assets tracked by Wilshire Trust Universe Comparison Service® (Wilshire TUCS®) posted an all-plan median return of 4.86 percent for fourth quarter and 18.13 percent for the year ending December 31, 2019. 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.
"Equities surged in the fourth quarter of 2019 across geographies thanks to improvements in investor sentiment, continued central bank support and economic data that exceeded expectations," said Jason Schwarz, president, Wilshire Analytics and Wilshire Funds Management. "Investor sentiment also benefited from a ?Phase One' trade deal between the U.S. and China that removed some uncertainty for investors in the near-term," Schwarz noted.
A strong first quarter start to 2019, and four positive quarters in a row combined to make 2019 the best year since the 2009 Financial Crisis rebound, which gained 18.47 percent.
U.S. equities, represented by the Wilshire 5000 Total Market Index?, rose 9.08 percent in the fourth quarter and 31.02 percent for the year; meanwhile, international equities, represented by the MSCI AC World ex U.S., rose 8.92 percent in the fourth quarter and 21.51 percent for the year. U.S. bonds, represented by the Wilshire Bond Index?, had a slight 0.61 percent fourth quarter gain, netting 11.49 percent for the year.
Across all plan types, quarterly median returns ranged from 2.37 to 5.12 percent gains for large corporate funds (assets above $1 billion) and public funds, respectively. One-year returns spanned low and high medians, ranging from 15.74 to 19.03 percent gains for large foundations and endowments (assets above $500 million) and large corporate funds (assets above $1 billion), respectively.
"All plan types underperformed the 5.69 percent gain of the 60/40 portfolio for the quarter," noted Schwarz.
For the year, all plan types underperformed the 60/40 portfolio 23.21 percent gain. Small outperformed large across all plan types for both fourth quarter and the year due to greater U.S. equity exposure, with the single exception of large corporate plans performance for the year. Allocations trends continue to highlight significant exposure for large foundations and endowments to alternatives, with a median fourth quarter allocation of 41.58 percent.
Large plans (assets above $1 billion) overall posted median gains of 4.57 and 17.45 percent for the quarter and year ending December 31, respectively while small plans (assets less than $1 billion), outperformed large for the quarter and year at 4.92 and 18.13 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 260 employees serving the needs of investors around the world. Based in Santa Monica, California, Wilshire serves approximately 500 clients across more than 20 countries. 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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Data and charts in this article are copyrighted and owned by Wilshire Associates Incorporated.