Corporate Funds Post Highest Returns Among Institutional Investors in Q2 2017

Institutional assets tracked by the Wilshire Trust Universe Comparison Service (Wilshire TUCS) saw a median return of 2.88% for all plan types in the second quarter and a median one-year gain of 11.31%.

Corporate funds saw a quarterly gain of 3.13% and a one-year return of 9.58%. Public funds’ quarterly and one-year returns were 2.9% and 12.41%, respectively, and foundations and endowments returned 2.78% and 11.70%, respectively. Taft-Hartley defined benefit (DB) plans saw a quarterly return of 2.65% and a one-year return of 11.57%, while Taft-Hartley health and welfare funds experienced quarterly and one-year returns of 1.70% and 6.35%, respectively.

“This quarter marked the seventh consecutive positive quarter, the longest string of positive quarterly returns for all plan types since June 1998, which marked a string of 14 positive quarters in a row,” says Robert J. Waid, managing director, Wilshire Associates.

Wilshire TUCS returns were supported by continued strong performance across all major asset classes. The Wilshire 5000 Total Market Index returned 2.95% for the second quarter and 18.54% for the year ending June 30, while the MSCI AC World ex U.S. (Net) for international equities rose 5.78% in the second quarter and 20.45% for the year. The Wilshire Bond Index also gained 1.95% in the second quarter and 1.64% for the year.

In the second quarter and for the year ending June 30, larger public funds and foundations and endowments outperformed smaller ones. Large foundations and endowments continued to have significant exposure to alternatives, although the median exposure did decline to 37.58% in the second quarter.

All plan types with assets greater than $1 billion experienced median returns of 3.15% for the second quarter and 12.01% for the year ending June 30, compared to plans with assets less than $1 billion, which experienced median returns of 2.72% for the second quarter and 11.12% for the year.