Institutional investors posted modestly positive returns for the quarter ended June 30, with large public pension funds leading the pack, data from Wilshire Advisors showed.
Plans in the Wilshire Trust Universe Comparison Service posted median returns of 1.1% and 10% for the quarter and year, respectively, ended June 30.
“In aggregate, current economic data implies conditions that are consistent with a soft landing, which appears susceptible to further slowing as recent corporate earnings and inflation readings indicate continued deterioration in consumption demand,” said Josh Emanuel, chief investment officer at Wilshire Advisors, in a news release Aug. 8. “All plan types underperformed a traditional 60/40 portfolio, while larger plans with smaller allocations to bonds generally outperformed smaller plans, by roughly 20 basis points on average.”
Large public funds (with assets above $5 billion) posted the highest returns for the quarter across all plan types, with a median return of 1.5%, thanks primarily to higher allocations to public equities and lower allocations to fixed income, while large corporate pension funds (with assets above $1 billion) — which on average have higher allocations to fixed income than other plan types — bottomed out the list with a median return of 0.6%.
For the year ended June 30, small public pension funds (with fewer than $1 billion in assets) had the highest median return at 11.9%, while large corporate pension funds had the lowest at 5.9%.
By asset class, the Wilshire 5000 Total Market index returned 3.3% and 23.2% for the quarter and year ended June 30, respectively. The MSCI ACWI ex-U.S. index posted respective quarterly and one-year returns of 1% and 11.6%. The Wilshire Bond index, meanwhile, returned a median -0.1% and 2.7% for quarter and year ended June 30, respectively.
All plan median returns for the quarter underperformed the 60/40 portfolio gain of 1.8%, and outperformed the return of -0.8% for the multiasset Wilshire Risk Parity -12% Target Volatility index, The news release also noted.
For the year ended June 30, all large and small plan groups outperformed the 60% stock/40% bond portfolio’s return of 12.5%, while most outperformed the Wilshire Risk Parity -12% Target Volatility index return of 8.4%.
