Master Trusts See Healthy Returns in Q3 2010

November 15, 2010 ( - All Master Trusts returned a healthy 8.26% during the third quarter resulting in a one year return of 9.97% according to the Wilshire Trust Universe Comparison Service (Wilshire TUCS).

Corporate and Public plans had the strongest showing for the quarter, returning 8.89% and 8.72%, respectively. Foundations and Endowments returned 7.83% as they were dragged down a bit by their allocation to hedge funds which underperformed the U.S. (Wilshire 5000, 11.50%) and International Equity (Wilshire Global ex-US, 17.14%) markets in the third quarter, Wilshire said in a press release.  

In the broad universe of All Master Trusts, the Plans over One Billion outperformed the broader universe returning 8.59%. However, in the Foundation and Endowment universe, where the larger plans generally have a lower allocation to equities and a higher allocation to alternatives such as hedge funds, the large plans underperformed returning 7.34%.  

According to the press release, for the quarter ending September the equity style median returns ranged from 10.33% for Mid Cap Value to 13.11% for Mid Cap Growth. Overall, the growth managers outperformed both the value and neutral (core) portfolios during the quarter. There is yet again a wide range of returns for the annual period ending September with a low of 8.88% for Large Value and a high of 16.71% for Mid Cap Neutral managers.   

The returns for fixed income mangers varied greatly this quarter as indicated by the TUCS Fixed Income Style medians. High Yield managers had the best performance for both the quarter and the year ending September with returns of 6.28% and 16.52%, respectively. The Short Term managers had the weakest showing for the same periods with returns of 0.64% and 3.13%. Those same two styles were also the best and worst performers over the five year period where High Yield managers returned an annualized 7.93% and Short Term managers returned 4.17% annualized.  

Wilshire TUCS includes approximately 900 plans representing $2.5 trillion in assets.