Institutional Investors See Another Good Quarter

May 7, 2013 ( - Double digit U.S. equity returns powered a solid first quarter for all institutional plan types, according to the Wilshire Trust Universe Comparison Service (TUCS).

“The first quarter performance spread for median plan return types was significant with a low return of 2.98% for the conservative Taft Hartley health and welfare funds to a high return of 5.98% for Taft Hartley defined benefit plans,” stated Robert J. Waid, managing director, Wilshire Associates. “The median quarterly return for all plans was 4.77%,” he added. Corporate funds had a quarterly return of 4.25%; public funds 5.20%; and foundation and endowments 4.59%.  

“The spread can be primarily attributed to different exposures to the U.S. equity market,” noted Waid. “The Wilshire 5000 closed the quarter with its 16th all-time-high in 2013, resulting in a quarterly return of 10.91%. This almost matched the median U.S. equity plan return of 10.92%. Despite the Barclays U.S. Aggregate falling for the first time since 2006 with a -0.12% return, the median U.S. fixed income plan return was 0.28%.”  

Even though these were the best plan returns since the first quarter 2012, all measured plan types underperformed the simple 60/40 (U.S. Equity/U.S. Bond) default asset allocation.

The median allocation for all master trusts was 40.42% U.S. equities, 10.47% international equities, 27.01% U.S. bonds and 2.54% cash. For corporate funds, the median allocation was 35.96% U.S. equities, 8.42% international equities, 32.59% U.S. bonds, and 2.51% cash.  

For public funds the median allocation was 44.27% U.S. equities, 13.43% international equities, 25.23% U.S. bonds, 3.02% cash, 3.48% real estate and 0.79% alternative investments. For foundations and endowments, the median allocation was 34.28% U.S. equities, 13.63% international equities, 19.93% U.S. bonds, 2.22% cash and 7.67% alternatives.  

Taft Hartley defined benefit plans had 49.51% in U.S. equities, 7.74% in international equities, 29.24% in U.S. bonds, 2.99% in cash and 1.28% in real estate.  

TUCS is a cooperative effort between Wilshire Analytics, the investment technology unit of Wilshire Associates Incorporated, and custodial organizations. Wilshire TUCS includes more than 1,700 plans representing in excess of $3.41 trillion in assets.