SANTA MONICA, Calif.–(BUSINESS WIRE)–Institutional assets tracked by Wilshire Trust Universe Comparison Service® (Wilshire TUCS®) posted a median return across all plans of -4.94% for the first quarter and 3.47% for the year ending on March 31, 2022. Wilshire TUCS, a cooperative effort between Wilshire and custodial organizations, is widely regarded as the definitive benchmark for the performance and asset allocation of US institutional plans.
“Large plans with higher allocations to alternative investments outperformed as rising interest rates and tighter financial conditions weighed on the performance of traditional assets, and the diversification benefit of alternative investments waned. proven valuable in this market environment,” said Jason Schwarz, president of Wilshire. “Allocations to real assets such as commodities have also provided a substantial diversification benefit over the past year, as evidenced by the risk parity outperformance versus a 60/40 portfolio,” Schwarz added. .
US stocks, as represented by the FT Wilshire 5000℠ Index, fell -4.98% in the first quarter and rose 13.09% for the 12 months to March; Meanwhile, international stocks, represented by the MSCI AC World ex US, fell -5.36% in the first quarter and rose 7.28% for the year. US bonds, as represented by the Wilshire Bond Index℠, fell -6.09% in the first quarter and -2.58% for the first quarter.
Across all plan types, quarterly median gains ranged from -6.08 to -2.30% for large corporate funds (assets greater than $1 billion) and very large public funds (assets greater than $5 billion), respectively. Median one-year returns ranged from 1.72% to 10.50% for corporate funds and foundations and endowments (assets greater than $500 million), respectively.
For the quarter, all plan medians except Small Endowments and Small Endowments and Large Enterprise Funds outperformed the 60/40 portfolio loss by -5.55%. All median small groups except small public funds underperformed the -5.02% loss in the multi-asset Wilshire Risk Parity Index – 12% Target Volatility. Large public funds and foundations and endowments outperformed small ones in the first quarter mainly due to greater exposure to US alternatives. Allocation trends continue to show significant exposure of large foundations and endowments to alternatives, with a median allocation of 50.00% in the first quarter. Large companies and public funds had median Q1 allocations to alternatives of 17.50 and 19.82% respectively.
For the year, large and small plan groups outperformed the 2.70% gain in the 60/40 portfolio, but underperformed the 10.51% gain in the multi-asset Wilshire Risk Parity Index – 12% Target Volatility. Large plans outperformed small plans in all plan types for the year.
Large plans (assets greater than $1 billion) overall posted losses of -3.86% for the quarter and median gains of 6.74% for the year ending March 31, 2022; meanwhile, smaller plans (assets below $1 billion) underperformed larger ones for the quarter and the year with returns of -5.27 and 2.85%, respectively.
Wilshire is a global provider of market-leading indices, advanced analytics and multi-asset investment solutions. A trusted partner to a diverse range of over 500 institutional investors, advisors and financial intermediaries, our clients rely on us to improve the results of their investments for a better future. Wilshire is headquartered in the United States with offices around the world and advises on over $1.3 trillion in assets, including $97 billion in assets under management.
More information about Wilshire can be found at www.wilshire.com.
Follow us on Twitter: @WilshireAssoc