Institutional Assets tracked by the Wilshire Universe Comparison Service posted an all-plan median return for the third quarter of 2.63%; for the year ended September 30, the median is 6.90%.
The third quarter built on the second quarter’s slight rebound from a negative first quarter, when all plans posted negative returns for the first time in nearly three years. Combined performance across both the second and third quarters pulled the September 30 one-year return down to 6.90% from 7.50% for the June 30 one-year return.
“Despite headwinds in bonds due to a significant rise in interest rates late third quarter, exposure to U.S. equities clearly helped support plan performance,” says Jason Schwarz, president of Wilshire Analytics and Wilshire Funds Management. “The recent mix of strong U.S. economic indicators and generally strong earnings results has continued to help drive U.S. equity returns higher.”
U.S. equities gained 7.27% in the third quarter and 17.60% for the year ended September 30. International equities rose 0.71% in the third quarter and 1.76% for the year ended September 30. U.S. bonds were up 0.48% in the quarter and down -0.73% for the year.
Large corporate funds with assets greater than $1 billion saw gains of 1.92% in the third quarter. Their median gain in the quarter was 2.42% and 7.48% for the year. Taft Hartley defined benefit plans had gains of 3.09% in the third quarter. Large corporate funds and endowments with assets above $500 million experienced one-year returns ranging from 3.79% to 8.70%.
For both the third quarter and the September 30 year, small plans with less than $1 billion outperformed large plans, due to greater U.S. equity exposure. Small plans were up by an average of 2.75% in the third quarter and 6.70% for the year ended September 30.