Institutional investors recorded positive gains for the quarter ended Dec. 31, although they underperformed the traditional 60% stocks/40% bonds portfolio, data from Wilshire Advisors showed.
Plans in the Wilshire Trust Universe Comparison Service posted a median return of 8% for the quarter ended Dec. 31.
"The strength of the U.S. economy in the face of moderating inflation has provided an opportunity for a pause in interest rate hikes and renewed optimism for the economy and risk assets," said Josh Emanuel, chief investment officer at Wilshire Advisors, in a news release Feb. 12. "All plan types underperformed a traditional 60/40 portfolio, while smaller plans with higher allocations to public markets generally outperformed larger plans, by more than 100 basis points in some cases."
The traditional 60/40 portfolio returned 9.4% for the three months ended Dec. 31, according to the Wilshire data.
By asset class, the Wilshire 5000 Total Market index returned 12.1% and 26.1% for the quarter and year ended Dec. 31, respectively. The MSCI ACWI ex-U.S. index posted respective quarterly and one-year returns of 9.8% and 15.6%. The Wilshire Bond index, meanwhile, returned a median 8% and 6.7% for quarter and year ended Dec. 31, respectively.
Across all plan types for the quarter ended Dec. 31, small endowments and foundations (with $500 million or less in assets) had the highest median return at 8.9%, while large foundations and endowments (with more than $500 million in assets) had the lowest median return at 5.8%.
With three of four quarters in 2023 chalking up positive returns, the Wilshire TUCS plans had a healthy median return of 12.2% .
For the year ended Dec. 31, small public pension funds (with assets below $1 billion) had the highest median return at 14.4%, while large corporate pension plans (with assets above $1 billion) had the lowest at 9.4%.
