Wilshire TUCS Reports Longest Institutional Assets Hot Streak Since 1998

Wilshire Trust Universe Comparison Service (Wilshire TUCS) posted its seventh positive quarter in a row, its longest positive quarterly streak since June 1998, which saw 14 consecutive positive quarters.

The institutional assets saw an average return of 2.88% for all plan types in Q2 and an average one-year gain of 11.31%, compared to 10.49% for the year ending March 31, 2017.

This quarter’s one-year return is the highest since the period ending June 30, 2014, which reported a 15.51% gain.

Returns for Q2 saw strong performances from all major asset classes. The Wilshire 500 Total Market Index returned 2.95% for the quarter and 18.54% for the year ending June 30, 2017. The MSCI AC World (net)—excluding US—for international equities increased 5.78% in the quarter and 20.45% for the year.

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The Wilshire Bond Index also saw a 1.95% increase in Q2 and 1.64% for the year, resulting in a positive range of median plan-type returns for the quarter. The low median return for Taft Hartley Health and Welfare Funds was 6.35 % and the high median return Foundations and Endowments with assets greater than $500 million was 13.58%.

“In the second quarter, only Taft Hartley Health and Welfare Funds experienced median returns worse than the 60/40 portfolio, which returned 2.55%,” Robert J. Waid, managing director, Wilshire Associates said in a statement. “This pulled the median return for all plan types down slightly to 2.88%, but it remained above the 60/40 portfolio for the second quarter in a row. Last quarter was notably the first time this happened since the quarter ending June 30, 2015.”

Larger Public funds and Foundations and Endowments outperformed their smaller counterparts, the former returning 11.85% versus the latter’s 11.31%. The average exposure dropped to 37.58% compared to Q1’s 40.34%.

“For the year ending June 30, 2017, large Foundations and Endowments, large Public Plans and small Public Plans experienced median returns better than the 60/40 portfolio, which returned 11.85%,” Waid said. “This pulled the median return for all plan types up to 11.31%, but it remained just below the 60/40.”

Plans with assets larger than $1 billion reported media returns of 3.15% for Q2 and 12.01% for the year ending June 30, 2017. Plans with assets under $1 billion reported an average of 2.72% in Q2 and 11.12% for the year.

Wilshire TUCS is a cooperative effort between Wilshire Analytics, the investment technology unit of Wilshire Associates Inc., and custodial organizations.

Tags: Pension, Q2, Wilshire, Wilshire Trust Universe Comparison Service

The $16 billion Kentucky Retirement Systems (KRS) reported double-digit investment returns for all pension and insurance funds under management for the fiscal year that ended June 30.

The KRS’ Employees Retirement System’s (KERS) Non-Hazardous Pension Fund returned 13.47%, and the County Employees Retirement System (CERS) Non-Hazardous Pension Fund returned 13.81%. The KERS Hazardous Pension Fund and the CERS Hazardous Pension fund gained 13.44% and 13.73%, respectively, while the State Police Retirement System (SPRS) returned 12.50%.

“The excellent investment returns reflect not only the attractive market conditions, but also the work done by our new investment committee, and the interim CIO and his staff,” said David Eager, interim executive director, in a statement. “Throughout the year, they have been adjusting our portfolios to better reflect the needs of each fund, to reduce management fees, and increase the risk-adjusted returns. The results bear out the success they have had.”

KRS said preliminary estimates indicate that the positive growth translates into a gain of almost $95 million in the value of the KERS Non-Hazardous Pension Fund, over $589 million for the CERS Non-Hazardous Pension Fund, and approximately $36 million for the State Police Pension Fund.

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The system’s insurance funds also reported double-digit growth for the fiscal year. The KERS Non-Hazardous Insurance Fund returned 13.78%, while the KERS Hazardous Insurance Fund reported a gain of 13.76%; CERS Non-Hazardous and Hazardous posted returns of 13.67% and 13.70% respectively, while The State Police Retirement System finished the fiscal year with a 13.70% gain.

“It’s very gratifying for the investment team to see that all of our efforts, and the efforts of the Investment Committee, over the last year have produced positive results,” said KRS Interim Executive Director of Investments Rich Robben. “I am particularly proud that all of our plans will end the year with more assets than they started with at the beginning of the year.”

The KRS also reported its monthly performance update for June. The KERS Non-Hazardous Pension Fund returned 0.53% for the month, and 3.17% for the quarter ending June 30, while the CERS Non-Hazardous Pension Fund, and CERS Hazardous plan returned 0.70% and 0.77%, respectively, for the month, and 3.26% and 3.29%, respectively, over the quarter. The SPRS Plan gained 0.77% for June, and 3.33% for the quarter.

“The second quarter was marked with the continued strong performance of risk assets across the globe,” said KRS in a statement. “Economic data seemed to underpin the movement with relatively strong earnings and top-line growth at the corporate level, job growth leading to lower unemployment figures, and muted inflation.”

The KRS added that “the quarter also provided active investors hope for outperformance as dispersion among market factors emerged, which has not been the case in prior quarters with higher correlations.”

Tags: Fiscal Year, Kentucky, Kentucky Retirement Systems, Pension

Kentucky Employees Retirement System Reports Double-Digit Gains