Another Good Quarter Boosts Master Trust Returns to over 30 Percent for Year; Corporate Plans Lead by Returning over 32 Percent
SANTA MONICA, CA All Master Trusts continued their upward recovery in the March quarter, returning 3.46 percent and resulting in a one year return of 30.39 percent according to the Wilshire Trust Universe Comparison Service® (Wilshire TUCS ®), a cooperative effort between Wilshire Analytics, the investment technology unit of Wilshire Associates, and custodial organizations. Wilshire TUCS, the most widely accepted benchmark for the performance of institutional assets, includes over 1,000 plans representing $2.59 trillion in assets.
The corporate plans with their relatively high allocation to U.S. Equity (41.8 percent) outperformed all other plan types returning 3.72 percent for the quarter and 32.65 percent for the year. The broader group of All Master Trusts (U.S. Equity exposure of 38.5 percent) returned 3.46 percent and 30.39 percent for the quarter and year respectively.
Over the last year, all plan types have had major movement in their asset class allocation. In the broadest category, All Master Trusts have increased their median equity (U.S. and International) exposure from 47.9 percent in March 2009 to 55.1 percent in March 2010. The Public plans had the largest change with equity allocation going from 50.6 percent to 59.4 percent over the year, while during the same period, the fixed income exposure dropped from 35.3 percent to 29.0 percent. Both the universes are still below the peak equity exposure of 61.7 percent for All Master Trusts and 61.7 percent for Public Funds in June 2007.
There was a great dispersion of median returns between equity styles in the March quarter and year ending March according to the Wilshire TUCS Equity Style Analysis. The median return of equity managers ranged from Large Growth at 4.25 percent and 46.90 percent for the quarter and the year and Small Value returning a stellar 10.90 percent and 74.68 percent respectively. "Clearly allocation to equity style, in addition to asset class allocation, made a difference in plan performance during the quarter as well as the last year," said Hilarie C. Green, CFA, managing director and head of Wilshire Analytics' Performance Reporting division.
"Fixed Income Style allocation also contributed to performance in the last year as returns ranged from a modest 4.88 percent for Short Term Fixed Income managers to an impressive 40.54 percent return for High Yield Fixed Income managers according to the TUCS Fixed Income Style Analysis," Green noted.
For more information about the Wilshire Trust Universe Comparison Service, please e-mail TUCS@wilshire.com.
Click here for this quarters Wilshire TUCS® Universe median rates of return and median asset allocation.
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, revolutionizing the industry by pioneering the application of investment analytics and research to investment management for 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 IndexSM, the first asset/liability models for pension funds, the first U.S. equity style metrics work and many other "firsts" as the firm grew to approximately 350 employees serving the investment needs of institutional and high net worth clients around the world.
Based in Santa Monica, California, Wilshire provides services to clients in more than 20 countries representing approximately 600 organizations. With ten offices on four continents, Wilshire Associates and its affiliates are dedicated to providing clients with the highest quality counsel, products and services. Wilshire Trust Universe Comparison Service®and Wilshire TUCS® are registered trademarks of Wilshire Associates Incorporated. Wilshire is a registered service mark of Wilshire Associates Incorporated. Please visit www.wilshire.com for more information.