Market Overview

Wilshire Trust Universe Comparison Service® Sees Modest Plan Gains Second Quarter, One-Year Returns Pull Back Slightly


-- U.S. Equity Exposure Fuels Performance, 60/40 Portfolio
Outperforms All Plan Types --

Institutional assets tracked by Wilshire Trust Universe Comparison
Service® (Wilshire TUCS®) posted an all-plan
median return of 0.88 percent for second quarter and 7.50 percent for
the year ending June 30. Wilshire TUCS, a cooperative effort between
Wilshire Analytics, the investment technology foundation of Wilshire
Associates Incorporated (Wilshire®), and custodial
organizations, is widely considered the definitive benchmark for U.S.
institutional plan assets performance and allocation.

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Wilshire TUCS plan returns versus 60/40 for second quarter 2018  (Graphic: Business Wire)

Wilshire TUCS plan returns versus 60/40 for second quarter 2018 (Graphic: Business Wire)

Second quarter rebounded slightly from last quarter, which posted
negative median returns for all plans for the first time in nearly three
years. Combined performance across both quarters pulled the June 30
one-year down to 7.50 from 9.51 percent for the one-year March 31 return.

"Exposure to U.S equities clearly helped fuel plan performance second
quarter," said Jason Schwarz, president, Wilshire Analytics and Wilshire
Funds Management. "The recent mix of positive economic indicators and
generally strong earnings results has helped drive equity returns
higher," Schwarz noted.

U.S. equities, represented by the Wilshire 5000 Total Market Index,
gained 3.83 percent second quarter and posted a 14.66 percent gain for
the June 30 one-year; meanwhile, international equities, represented by
the MSCI AC World ex U.S., fell -2.61 percent second quarter with a net
gain of 7.28 percent for the year. U.S. bonds, as represented by the
Wilshire Bond Index, also fell second quarter, posting -0.25
and -0.59 percent for the quarter and year, respectively.

Quarterly median returns across plan types ranged from 0.26 to 1.56
percent for large corporate funds (assets above $1 billion) and large
foundations and endowments (assets above $500 million), respectively.
One-year returns spanned low and high medians from the same, ranging
from 4.64 to 10.03 percent for large corporate funds and large
foundations and endowments, respectively.

"The 60/40 portfolio outperformed all plan types, posting a 2.20 percent
gain for the quarter," noted Schwarz. "While all plans types fell short
of the quarter's 1.8 percent target needed for a 7.5 percent annual
return, medians were positive across the board due mostly to U.S. equity
exposure," Schwarz added.

For both the quarter and June 30 one-year, small outperformed large
corporate funds due to greater U.S. equity exposure. Meanwhile, large
foundations and endowments increased their already significant
alternatives exposure in second quarter to 42.05 percent; this, combined
with a heavy exposure to U.S. public equity, helped large outperform
small foundations and endowments for both the quarter and year.

Large plans (assets above $1 billion) posted median gains of 0.63 and
8.04 percent for the quarter and year ending June 30, respectively.
Small plans (assets less than $1 billion), outperformed large for the
quarter but fell just short for the year at 1.04 and 7.28 percent,

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

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

About Wilshire Associates

Wilshire Associates, a leading global financial services firm, provides
consulting services, analytics solutions and customized investment
solutions 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 approximately 275 employees serving the needs of
investors around the world. Based in Santa Monica, California, Wilshire
provides services to clients in more than 20 countries representing more
than 500 organizations with assets totaling approximately US $9
trillion.* With ten offices worldwide, Wilshire Associates and its
affiliates are dedicated to providing clients with the highest quality
products and services. Wilshire® and Wilshire 5000® are registered
service marks of Wilshire Associates Incorporated. Wilshire 5000 Total
Market Index℠ is a service mark of Wilshire Associates Incorporated.

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*Client assets are as represented by Pensions & 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 9/30/17 and
12/31/17, and published 2/5/18 and 5/28/18, respectively.

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

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