The Wilshire Trust Universe Comparison Service reported that the institutional assets it tracks earned median returns of 1.00% for the third quarter, which brought its one-year return as of September 30 down to 4.58%.
The returns are off from before, when the assets returned 3.21% for the second quarter, and 6.47% for the 12 months to June 28.
“The significant decline in interest rates boosted performance of bonds and other interest rate sensitive assets, including defensive equities during third quarter,” Jason Schwarz, president of Wilshire Analytics and Wilshire Funds Management, said in a statement. “Despite strong year-to-date performance, the selloff in global equities during fourth quarter 2018 is weighing on the trailing one-year performance for most institutional plans.”
US equities, which are represented by the Wilshire 5000 Total Market Index, increased 1.23% for the quarter and 2.95% for the 12 months to September 30. International equities, represented by the MSCI AC World ex US, fell 1.80% for the quarter and 1.23% for the year.
US bonds, which are represented by the Wilshire Bond Index, increased 2.86% for the third quarter, and 11.77% for the year. Multi-asset, represented by the Wilshire Risk Parity—10% Target Volatility Index, rose 4.46% for the quarter and 18.75% for the year.
Median ranges for the quarter across plan types ranged from 0.45% for large foundations and endowments with assets above $500 million, to 2.17% for large corporate plans with assets above $1 billion. Public plans with assets above $5 billion earned 1.19% for the quarter.
Median ranges for the previous 12 months spanned from 3.86% for large foundations and endowments with assets above $500 million to 8.54% for large corporate plans with assets above $1 billion. Mega public plans, which have assets above $5 billion, had a one-year return of 5.49%.
All plan types, except large public plans, underperformed a portfolio comprised of 60% stocks and 40% bonds, which rose 1.88% during the third quarter. And for the year-ending September 30, all plan types, except large corporate plans, underperformed the 60/40 portfolio, which rose 6.48% during that time. Large plans outperformed small across all types for the year, except foundations and endowments.
Plans with assets greater than $1 billion had median returns of 1.17% and 5.49%
for the quarter and year ending Sept. 30, respectively. Plans with assets less than $1 billion returned 0.90% and 4.36%, respectively.
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Tags: Pension Plans, Returns, US bonds, US equities, Wilshire Trust Universe Comparison Service