Institutional investors saw their median returns drop in the first quarter due to the coronavirus pandemic, data from Wilshire Associates show.
Plans in the Wilshire Trust Universe Comparison Service posted median returns of -11.87% and -3.67% for the first quarter and year ended March 31, respectively. Wilshire previously reported median returns of 4.86% and 18.13% for the fourth quarter and year ended Dec. 31, respectively.
“The performance of U.S. institutional plan assets was negatively impacted by both equity and fixed-income exposures,” said Jason A. Schwarz, chief operating officer of Wilshire Associates in a news release. “Credit markets have deteriorated due to the abrupt shutdown of the global economy, and many investor portfolios had more credit risk than what is indicated by the performance of broad fixed income benchmarks.”
Mr. Schwarz added: “Many alternative investments, which are typically implemented to provide diversification to traditional assets, also struggled due to exposure to various segments of credit markets where dislocations have occurred in the very short term.”
Corporate defined benefit plans posted the highest median quarterly return in Wilshire’s universe, at -8.46%, followed by Taft-Hartley health and welfare funds, at -9.07%; Taft-Hartley pension plans, 11.8%; public pension plans, -12.81%; and foundations and endowments, -13.75%.
For the year ended March 31, corporate DB plans returned -0.6%; Taft-Hartley health and welfare funds, -1.49%; Taft-Hartley DB plans, -3.59%; public plans, -4.78%; and foundations and endowments, -5.6%.
By asset class, the MSCI ACWI ex-U.S. index posted quarterly and one-year returns of -23.36% and -15.57%, respectively. The Wilshire 5000 Total Market index, meanwhile, dropped -20.7% and -8.94% over those periods, respectively, while the Wilshire Bond index gained 0.93% and 8.17%.
Longer term, for the three, five and 10 years ended March 31, the TUCS universe returned a median annualized 3.1%, 3.42% and 6.22%, respectively.