During the final quarter of the year, institutional investors experienced favorable outcomes, though they did not achieve the performance level of the classic 60% equity/40% bond portfolio, according to insights from Wilshire Advisors. The data revealed by the Wilshire Trust Universe Comparison Service highlighted a median return of 8% for the quarter concluding on December 31.
Josh Emanuel, the Chief Investment Officer at Wilshire Advisors, commented on the economic backdrop, noting, "The U.S. economy's resilience amidst moderating inflation has facilitated a temporary halt in interest rate increases, fostering a renewed positive outlook for the economy and risk-oriented assets.
It was observed that all categories of plans fell short of the benchmark set by a conventional 60/40 mix, with smaller plans, particularly those more heavily invested in public markets, surpassing their larger counterparts by a significant margin, in some instances by over 100 basis points."
The quintessential 60/40 blend reported a 9.4% return for the three-month period ending December 31, as per Wilshire's statistics.
In terms of asset classes, the Wilshire 5000 Total Market Index showed impressive gains, with returns of 12.1% for the quarter and 26.1% for the year ending on December 31. The MSCI ACWI ex-U.S. Index also performed well, with quarterly and annual returns of 9.8% and 15.6%, respectively. Meanwhile, the Wilshire Bond Index saw median returns of 8% for the quarter and 6.7% for the year ending on the same date.
Examining the performance across different types of plans for the quarter ending December 31, small endowments and foundations, those managing $500 million or less, achieved the highest median return at 8.9%. Conversely, larger foundations and endowments, with assets exceeding $500 million, recorded the lowest median return at 5.8%.
Reflecting on the year's performance, with three out of four quarters registering positive returns, the Wilshire TUCS plans enjoyed a robust median return of 12.2%.
