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Money management

Active growth equity separate accounts topped core, value in 2018, Wilshire says

Active growth equity outperformed active core and value stocks in 2018, Wilshire Consulting shows in its ninth annual active management review.

The report, compiling statistics from 11,500 separate account products in its Wilshire Compass institutional investment database, also says that only active domestic small-cap and large-cap growth universes outperformed their respective benchmarks among domestic equity separate accounts.

Active small-cap and large-cap growth strategies returned a median market-adjusted gross 3.06% and 1.91%, respectively, in the year ended Dec. 31. Active domestic large-cap core and value stocks had median market-adjusted gross returns of -1.19% and -2.27%, respectively, while small-cap core and value stocks had respective median market-adjusted gross returns of -3.48% and -0.93%.

Other than growth, the only asset class in Wilshire's domestic equity universe that had a positive median gross market-adjusted return in 2018 was real estate investment trusts, at 0.3%.

The Wilshire U.S. Large Cap index returned -4.6% in the year ended Dec. 31, while the Wilshire U.S. Small Cap index returned -10.8%. The Wilshire U.S. 2500 Growth index returned -4.2%, while the Wilshire U.S. 2500 Value index returned -6.5%.

Active international equity strategies had a poor year all around, the report said, with all four groups posting negative returns when compared to their respective benchmarks. Active emerging markets equity strategies performed the best, posting a median market-adjusted gross return of -0.85% for the year ended Dec. 31, followed by global equity strategies at -0.97%, developed ex-U.S. equity strategies at -1.9% and developed ex-U.S. small-cap equity strategies at -2.51%.

The MSCI Emerging Markets returned (net USD) 14.6% for the year ended Dec. 31, while the MSCI EAFE index returned (net USD) -13.8%, and the MSCI All-Country World ex-US index returned (net USD) -10.7% and (net local currency) -14.2%.

Active domestic fixed-income strategies, meanwhile, posted positive returns compared to their benchmarks, with active high-yield strategies returning a median market-adjusted gross 1.33% for the year ended Dec. 31, and active domestic core strategies returning 0.65%.

The Bloomberg Barclays U.S. high yield index returned -2.1% for the year ended Dec. 31, while the Bloomberg Barclays U.S. aggregate index was flat.

The report is available on Wilshire Consulting's website.