Market Overview

Wilshire 5000® $2.8 Trillion December Loss Fuels First Negative Year since the Financial Crisis

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Record December Losses Top October's Previous Record, Combine for
Record Loss in Fourth Quarter and Net $2.2 Trillion Loss in 2018

The Wilshire 5000 Total Market IndexSM, the original pure and
complete measure of the U.S. stock market, fell -9.30 percent in
December, -14.29 percent fourth quarter and -5.27 percent in 2018 to
close the year at 25,647.29. Without dividends reinvested, the index had
an estimated market value all-time record monthly loss of $2.8 trillion
in December, all-time record quarterly loss of $4.7 trillion fourth
quarter and loss of $2.2 trillion for the year. Combined losses resulted
in the worst annual market value decline since the 2008 Financial
Crisis, according to Wilshire Associates Incorporated (Wilshire®), a
diversified global financial services firm.

"Volatility continued, with the Wilshire 5000 moving more than one
percent on nearly half of all active trading days in December, and of
those days, half again moved two percent," said Jason Schwarz, President
of Wilshire Analytics and Wilshire Funds Management. "The decision to
raise interest rates was met with concern that the Fed may slow the
already uncertain future of economic growth, and geopolitical risk
exacerbated concerns, as political dysfunction in Washington has led to
a government shutdown. Ultimately, December saw the worst percentage
loss for the Wilshire 5000 in nearly a decade, surpassing October's
all-time record point and dollar losses," he added.

Early 2018 small-cap gains were eclipsed by large-cap (represented by
the Wilshire US Small-Cap IndexSM and Wilshire US Large-Cap
IndexSM), which outperformed for the fourth consecutive
month, quarter and year with losses of -9.04, -13.69 and -4.64 percent,
respectively; meanwhile, small-cap fell -11.82, -19.67 and -10.84
percent for the month, quarter and year, respectively.

Early 2018 gains in growth cemented its top 2018 performance, in spite
of a lag to value for four straight months and fourth quarter. Large-cap
value (represented by the Wilshire US Large-Cap Value IndexSM)
returned -9.01, -10.75 and -5.94 percent for the month, quarter and
year, respectively; and, large-cap growth (represented by the Wilshire
US Large-Cap Growth IndexSM) fell further at -9.07, -16.82,
and slightly less at -3.58 percent for the same, respectively. While
large-cap value secured best style performance for the month
and last quarter, large-cap growth nabbed best style performance for the
year.

Small-cap growth (represented by the Wilshire US Small-Cap Growth IndexSM)
shed -12.00, -20.59, and -9.71 percent for the month, quarter and year,
respectively; meanwhile, small-cap value (represented by the Wilshire US
Small-Cap Value IndexSM) posted losses of -11.66, -18.73, and
-12.04 percent for the month, quarter and year, respectively.

Sectors

All Wilshire 5000 sectors were negative for the first time in over five
years. Utilities took best sector performance in December, losing -4.03
percent. Combined with a second best performance in October, Utilities
cemented best sector performance for the quarter with a gain of 0.79
percent. Annual 4.40 percent gains landed Utilities just behind Health
Care, the year's best sector with an .annual gain of 5.60 percent. Real
Estate, a top three performing sector for the past three months, fell to
third place for both the month and quarter with losses of -7.87 and
-6.22 percent, respectively. Consumer Staples, just ahead with losses of
-5.54 percent, held second best performance for the quarter.

Energy suffered from falling oil prices for the third month in a row,
fueling a worst sector performance in December with losses of -13.34 and
net losses for the quarter of -25.62. This, in addition to two previous
months this year as worst performing sector, combined to cement Energy
as worst performing sector in 2018, falling -19.47 percent. Financials
came in second worst for the month, falling -11.35 percent. Industrials,
a bottom three performer every other month for the past nine months,
ended fourth quarter as second worst for the quarter, falling -18.24
percent. Materials was second worst for the year, falling -16.63 percent.

BDC

Business development companies (represented by the Wilshire Business
Development Company IndexSM) performed worse than they had in
over eight years, falling -8.81 percent in December. These losses drove
quarterly losses down to -11.62 percent, and annual returns to -2.31
percent.

Real Estate

U.S. real estate (represented by The Wilshire US Real Estate Securities
IndexSM and Wilshire US Real Estate Investment Trust IndexSM)
fell -8.35 and -8.37 percent, respectively, in December. The month's
losses pulled quarterly and annual gains into negative territory, with
quarterly losses of -6.98 and -6.93 percent, respectively, and annual
losses of -4.80 and -4.84 percent, respectively, to hand U.S. real
estate its first negative year since the 2008 Financial Crisis.
Meanwhile, International public real estate (represented by the Wilshire
exUS Real Estate Securities IndexSM) fell less than U.S. real
estate, with a -1.83 percent December loss that helped it outperformed
for the quarter, but not the year, at -4.44 and -6.60 percent,
respectively.

Fixed Income

Bonds (represented by the Wilshire Bond IndexSM) closed
December up 1.69 percent and boosted quarterly gains to 0.86 percent;
however, bonds remained negative for 2018, falling -0.76 percent. Longer
duration bonds delivered strong performance in December, evidenced by
gains for the Nuveen Wilshire Intermediate (5-10) Corporate Bond Index,
Nuveen Wilshire Long (10-20) Corporate Bond Index, Nuveen Wilshire Long
(20-30) Corporate Bond Index and Nuveen Wilshire Ultra Long (20+) STRIPS
Index at 1.71, 2.41, 3.43 and 8.00 percent, respectively.

WILSHIRE RETURNS AT A GLANCE:

Index Name       Index Close       Total Return % Change    
MTD       QTD       YTD       1-Year       3-Year         5-Year
Wilshire 5000 25647.29 -9.30% -14.29% -5.27% -5.27% 9.12% 8.07%
Wilshire 4500 1212.91 -10.66% -17.96% -9.53% -9.53% 8.11% 5.84%
Wilshire US Large-Cap 5855.82 -9.04% -13.69% -4.64% -4.64% 9.33% 8.47%
Wilshire US Mid-Cap 9214.46 -10.39% -16.48% -9.35% -9.35% 7.92% 5.94%
Wilshire US Small-Cap 9027.84 -11.82% -19.67% -10.84% -10.84% 7.38% 4.70%
Wilshire US Micro-Cap 11679.18 -12.26% -23.50% -15.58% -15.58% 4.79% 2.54%
Wilshire US Large-Cap Growth 6767.10 -9.07% -16.82% -3.58% -3.58% 10.30% 9.63%
Wilshire US Large-Cap Value 4739.55
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