Institutional Assets Rebound Slightly in Q2

Gains 0.88% after registering first loss in nearly three years during Q1.

Institutional assets rebounded in the second quarter, albeit slightly, and posted an all-plan median return of 0.88% after producing the first negative results in almost three years in the previous quarter, according to the Wilshire Trust Universe Comparison Service.

The meager combined returns for the first two quarters of the year lowered the one-year return to 7.5% as of June 30, from 9.51% at the end of March. For the first quarter of the year, institutional assets saw a median loss of 0.47%.  

“Exposure to US equities clearly helped fuel plan performance second quarter,” Jason Schwarz, president of Wilshire Analytics and Wilshire Funds Management, said in a release. “The recent mix of positive economic indicators and generally strong earnings results has helped drive equity returns higher.”

US equities, as measured by Wilshire 5000 Total Market Index, gained 3.83% in the second quarter, and registered a one-year gain of 14.66% as of June 30, while international equities, as measured by the MSCI AC World ex US, fell 2.61% during the quarter to post a one-year net gain of 7.28%. US bonds, as tracked by the Wilshire Bond Index, also fell, posting a loss of 0.25% for the quarter, and are down 0.59% for the 12 months to June 30.

Quarterly median returns across plan types ranged from 0.26% for corporate funds with assets above $1 billion, to 1.56% for foundations and endowments with assets above $500 million. For the 12 months to June 30, the corporate funds returned 4.64%, while foundations and endowments gained 10.03% during the same time period.

“The 60/40 portfolio outperformed all plan types, posting a 2.20% gain for the quarter,” said Schwarz. “While all plans types fell short of the quarter’s 1.8% target needed for a 7.5% annual return, medians were positive across the board due mostly to US equity exposure.”

For both the second quarter and the 12 months to June 30, small corporate funds outperformed large corporate funds due to greater US equity exposure, according to Wilshire.

Plans with assets of more than $1 billion had median gains of 0.63% for the quarter, and 8.04% for the 12 months ending June 30. Plans with assets of less than $1 billion outperformed large plans for the quarter with a 1.04% gain, but fell just shy for the year at 7.28%.

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