Institutional investors lost on average about 6.8% in the fourth quarter, data from Wilshire Associates and Northern Trust show.
Plans in the Wilshire Trust Universe Comparison Service posted median returns of -7.05% and -4.05% for the fourth quarter and year ended Dec. 31, respectively.
It's the worst quarterly performance since the third quarter of 2011 (-8.53%), and the worst year since the financial crisis, when plans fell -24.79%.
"Equity exposure weighed on plan performance in the fourth quarter, as geopolitical concerns, earnings revisions, and higher interest rates led to a deterioration in investor sentiment," said Jason Schwarz, president, Wilshire Analytics and Wilshire Funds Management, in a news release.
Taft-Hartley health and welfare funds posted the highest median quarterly return in Wilshire's universe at -4.9%, followed by corporate defined benefit plans, -5.68%; public DB plans, -7.51%; foundations and endowments, -7.52%; and Taft-Hartley DB plans, -7.61%.
By asset class, the MSCI World ACWI ex-U.S. equity index posted quarterly and one-year returns of -11.46% and -14.2%, respectively. The Wilshire 5000 Total Market index, meanwhile, returned -14.29% and -5.27%, over those periods, respectively, and the Wilshire Bond index, 0.86% and -0.76%.
Longer term, for the three, five and 10 years ended Dec. 31, the TUCS universe returned a median annualized 5.58%, 4.61% and 8.52%, respectively.
Meanwhile, data from the Northern Trust universe show the median plan returned approximately -6.6% for the quarter and -3.8% for the 12 months ended Dec. 31, resulting in "the worst calendar year performance for plans in the universe since a nearly 25% loss in 2008 during the global financial crisis," said a news release announcing the data.
"Institutional plan sponsors benefited from a long run of positive performance by U.S. equities since the financial crisis ended in the second quarter of 2009, but equity markets have been significantly more volatile in the past year," said Mark Bovier, regional head of investment risk and analytical services at Northern Trust, in the release. "U.S. equities were the driver of fourth-quarter losses and had a significant impact on long-term investment results as well."
The median public fund lost 7.3% in the fourth quarter, while corporate DB plans lost 5.5%, and foundations and endowments, lost 6.3%.
Corporate DB plans returned -4.8%, 6% and 5% for the one, three and five years ended Dec. 31, respectively. Public DB plans' one-, three- and five-year returns were -4%, 6.2% and 5.1%, respectively. Foundations and endowments returned -2.6%, 6% and 4.9% for the one, three and five years ended Dec. 31.