Most asset classes positive for quarter
Santa Monica, Calif., August 10, 2023 – Institutional assets tracked by Wilshire Trust Universe Comparison Service® (Wilshire TUCS®) posted an all-plan median gross return of 2.67% for the second quarter and 8.08% for the year ending June 30, 2023. Wilshire TUCS, a cooperative effort between Wilshire and custodial organizations, is widely considered the definitive benchmark for U.S. institutional plan assets performance and allocation.
“Global economic growth forecasts have become increasingly uncertain, particularly in the United States, where investors are beginning to question the once certain probability of a recession in 2023,” said Jason Schwarz, President of Wilshire. “All plan types underperformed a traditional 60/40 portfolio, while smaller plans with higher allocations to public markets outperformed larger plans by approximately 50 basis points,” Schwarz added.
U.S. equities, represented by the FT Wilshire 5000 Index℠, rose 8.43% in the second quarter and 19.03% for the 12 months ending in June; meanwhile, international equities, represented by the MSCI AC World ex U.S., returned 2.44% in the second quarter and 12.72% for the past year. U.S. bonds, represented by the Wilshire Bond Index℠, fell -0.72% in the second quarter with a minimal gain of 0.04% for the one-year.
Across all plan types, quarterly median gains ranged from 1.06% to 3.21% for large corporate funds (assets above $1 billion) and small foundation and endowment funds (assets below $500 million), respectively. One-year median returns ranged from 3.85% to 10.00% for large corporate funds and small public funds (assets below $1 billion), respectively.
For the quarter, all plan medians underperformed the 60/40 portfolio gain of 3.36%. However, all plan medians outperformed the -0.20% loss for the multi-asset Wilshire Risk Parity –12% Target Volatility Index. Small foundation and endowment funds outperformed all other sizes and plan types in the second quarter due mostly to a larger (> 50%) exposure to U.S. public equities, the best performing major asset class during the quarter. Allocation trends continue to show significant exposure for large foundations and endowments to alternatives, with a median second quarter allocation above 50%. Large corporate and public funds had median second quarter allocations to alternatives of 28.9% and 23.4% respectively.
For the year, all large and some small plan groups underperformed the 9.43% gain for the 60/40 portfolio but outperformed the 2.53% gain for the multi-asset Wilshire Risk Parity – 12% Target Volatility Index. Large plans underperformed small across all plan types for the one-year, due mostly to smaller allocations to public equities.
Large plans (assets above $1 billion) overall posted gains of 2.41% for the quarter and 7.09% for the year ending June 30, 2023; meanwhile small plans (assets less than $1 billion) outperformed large for the quarter and the year with returns of 2.93% and 8.61%, respectively.
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Wilshire Analytics provides investment firms worldwide with multi-asset class solutions for analytics, attribution, risk management, performance, GIPS reporting, total fund reporting, style and peer universe comparisons, including Wilshire Trust Universe Comparison Service® (TUCS®).Wilshire Analytics currently serves some of the world’s largest asset managers, banks, pension funds and insurance companies.
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