International Equities Drag Down Institutional Plan Performance

August 6, 2012 ( - Despite a rising bond market, falling equity returns -- especially international equity -- proved to be a drag on the performance of all institutional plan types, according to the Wilshire Trust Universe Comparison Service (Wilshire TUCS).

“After the best quarter in one-and-one-half years, the median quarterly return for all plan types was down 1.58% in the second quarter,” said Robert J. Waid, managing director, Wilshire Associates.  

“Taft Harley Defined Benefit plans were off the most with a -1.98% median return while Taft Harley Health and Welfare Funds doing the best with a median return of -0.70%. For the year ending June 30, Corporate Plans were the best performer gaining a median return of 3.68%, while Foundations and Endowments lagged with a 0.37% median return,” Waid added.  

“With quarterly returns for the Wilshire 5000 Total Market Index of -3.13% and the Wilshire Global exUS Index even worse at -8.18%, the asset class that somewhat saved returns for the quarter and year was fixed income,” Waid noted.  

“The Barclays U.S. Aggregate gained 2.06% for the quarter, but the equity/bond spread is more pronounced with the one-year numbers of 3.96%, -14.57% and 7.47%, respectively. With a median exposure of 34.82% to bonds, Corporate Plans’ median return of -0.88% outperformed that of Public Plans, which had a median allocation of 25.45% to bonds and a -1.73% median performance for the quarter. One-year median performances were 3.68% and 1.15%, respectively,” he concluded.  

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