Institutional investors recorded positive returns for the fourth quarter although that was not enough to prevent significant negative returns for the year ended Dec. 31, data from Wilshire Advisors show.
Plans in the Wilshire Trust Universe Comparison Service posted median returns of 5.6% and -13.4% for the fourth quarter and year ended Dec. 31, respectively.
The fourth quarter was the first positive quarter of the year.
"The final quarter of 2022 saw an improvement in investor sentiment as the market priced in moderation in the pace of Federal Reserve rate hikes," said Jason Schwarz, president and chief operating officer of Wilshire Associates, in a news release Thursday. "All plan types underperformed a traditional 60/40 portfolio, while smaller plans with higher allocations to public markets outperformed larger plans by nearly 200 basis points."
Across all plan types, small foundations and endowments (with less than $500 million in assets) had the strongest median return for the quarter ended Dec. 31 at 6.6%, while large corporate pension plans (with more than $1 billion in assets) had the lowest median return at 3.1%.
According to Wilshire data, the traditional 60% stocks/40% bonds portfolio returned 6.6% for the quarter.
For the year ended Dec. 31, large foundations and endowments (with assets above $500 million) had the least damaging median return at -6.1%, while small corporate pension plans (with less than $1 billion) had the lowest at -14.4%.
By asset class, the Wilshire 5000 Total Market index returned 7.1% and -19% for the quarter and year ended Dec. 31, respectively, and the MSCI ACWI ex-U.S. index posted respective quarterly and one-year returns of 14.3% and -16%. The Wilshire Bond index, meanwhile, returned a median 2.4% and -13.5% for quarter and year ended Dec. 31, respectively.
