Institutional Investors See First Losing Year Since Financial Crisis

Institutional assets tracked by the Wilshire Trust Universe Comparison Service (Wilshire TUCS), saw the first negative calendar year since the financial crisis, with a median return of -0.17%.

“Similar to 2013 and 2014, this was a quarter and a year where exposure to U.S. equities trumped most other asset classes. The main exception in performance for 2015 was the U.S. real estate asset class with the Wilshire US RESI gaining 7.64% and 4.81% for the quarter and year, respectively. The Wilshire 5000 Total Market Index was up 6.36% and 0.67% during the fourth quarter and in 2015, respectively, versus the MSCI AC World ex U.S. or international equity’s 3.24% gain for the quarter and -5.66% loss for the year,” says Robert J. Waid, managing director, Wilshire Associates.

Waid noted that bonds were flat, as the Barclays U.S. Aggregate fell -0.57% for the fourth quarter but held on to a gain of 0.55% for the year.

All plan types had a median return of 2.41% for the quarter, registering a slight bounce off the third quarter’s worst quarter in four years. Taft Hartley Health and Welfare Funds had a median return of 1.54% and Taft Hartley Defined Benefit Plans had a median return of 2.96% for the quarter.

“The spread for 2015 returns was also small, with a low of -0.45% for Foundations and Endowments and a high of 1.37% for large Foundations and Endowments with assets greater than $500 million,” Waid adds.

“Since small plans generally have larger exposure to U.S. Equities than large plans, it is again surprising that large plans outperformed smaller plans for the year,” says Waid. “All plan types with assets greater than $1 billion had median returns of 2.13% and 0.35% for the quarter and year, respectively, compared to plans with assets less than $1 billion with median returns of 2.49% and -0.27%, respectively.”