Wilshire Trust Universe Comparison Service® Sees Most Large Plans Beat 7.5% Target While Most Small Plans Fall Short

-- Trump U.S. Equity Rally Pulls Fourth Quarter Returns Positive --

SANTA MONICA, Calif.--()--Institutional assets tracked by the Wilshire Trust Universe Comparison Service® (Wilshire TUCS®), saw the Trump Rally in U.S. equity returns from November 8, 2016 to December 31, 2016 power the Wilshire 5000 Total Market IndexSM (Wilshire 5000®) to a gain of 6.05 percent for that period, pulling the median Wilshire TUCS all plan return up to 0.59 percent for the quarter and 7.24 for the year. Wilshire TUCS, a cooperative effort between Wilshire Analytics, the investment technology unit of Wilshire Associates Incorporated (Wilshire®), and custodial organizations, is considered the most widely accepted benchmark for the performance and allocation of institutional assets in North America.

The Wilshire 5000 was up 4.54 percent and 13.37 percent during the fourth quarter and in 2016, respectively, versus the MSCI AC World ex U.S. or international equity’s -1.25 percent loss for the quarter and 4.50 percent gain for the year.

“This was the fourth year in a row where exposure to U.S. equities outperformed most other asset classes in the fourth quarter and for the year,” said Robert J. Waid, managing director, Wilshire Associates. “Treasury yields accelerated their rise after the election as the Wilshire Bond IndexSM fell -2.83 percent for the fourth quarter but held on to a gain of 5.67 percent for the year. This translates to a range of plan returns with a low of -0.95 percent for large Corporate Funds and a high of 1.40 percent for large Foundations and Endowments for the quarter.”

The spread for 2016 returns was larger with a low of 5.42 percent for Taft Hartley Health and Welfare Funds, and a high of 7.92 percent for large Public Funds with assets greater than $1.0 billion. 2016 had the best median plan returns of the past three years which translated to weak multi-year median plan returns of 4.32, 8.06 and 5.28 percent for three-, five- and ten-year returns, respectively.

“This was also the fourth year in a row where the 60/40 portfolio beat the median plan return with a return of 10.29 percent, and as long as U.S. equities continue as the top performing asset class, diversification will lag 60/40,” Waid added. “Since small plans generally have larger exposure to U.S. Equities than large plans, it is surprising that large plans outperformed smaller plans for the year.”

Though trailing the 60/40 portfolio, large plan median 2016 returns were still at or above the classic 7.5 percent return target with all large plans posting a median annual return of 7.83 percent while small plan median returns fell short of the 7.5 percent target with all small plans posting a median annual return of 6.87 percent.

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

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

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 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 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.

Contacts

Lisa Herbert, +1-310-451-3051
lherbert@wilshire.com

Contacts

Lisa Herbert, +1-310-451-3051
lherbert@wilshire.com