WILSHIRE TRUST UNIVERSE COMPARISON SERVICE SHOWS FOUNDATIONS AND ENDOWMENTS AS ONLY PLAN CATEGORY WITH A NEGATIVE PERFORMANCE FOR 2012

Size: px

Start display at page:

Download "WILSHIRE TRUST UNIVERSE COMPARISON SERVICE SHOWS FOUNDATIONS AND ENDOWMENTS AS ONLY PLAN CATEGORY WITH A NEGATIVE PERFORMANCE FOR 2012"

James Baker
8 years ago
Views:

1 FOR IMMEDIATE RELEASE CONTACT: Kim Shepherd WILSHIRE TRUST UNIVERSE COMPARISON SERVICE SHOWS FOUNDATIONS AND ENDOWMENTS AS ONLY PLAN CATEGORY WITH A NEGATIVE PERFORMANCE FOR 2012 Allocation to U.S. and Non-U.S. Equities Affected Returns SANTA MONICA, Calif., February 6, 2012 Buoyed by the double digit rebound of U.S. equity and real estate returns in October, most institutional asset owners closed 2011 in positive territory, according to the Wilshire Trust Universe Comparison Service (Wilshire TUCS ), a cooperative effort between Wilshire Analytics, the investment technology unit of Wilshire Associates Incorporated (Wilshire ), and custodial organizations. The only plan category with a negative median annual return was Foundations and Endowments at percent. Coming in at 4.64 percent, the category had one of the lowest median fourth quarter returns. Foundations and Endowments with assets greater than $500 million had a one-year median return of 0.95 percent and a median quarterly return of 3.60 percent. At 2.60 percent, Taft-Hartley Health and Welfare Funds had the lowest median fourth quarter return. This can be attributed to their significant exposure to debt with a median allocation to U.S. bonds of percent. On the other side of the scale, Taft Hartley Defined Benefit Plans were rewarded with a top median fourth quarter return of 5.94 percent for their percent and 5.82 percent exposures to U.S. Equities and Real Estate, respectively. For the year, the plans saw a 0.86 percent median return. The fourth quarter was one where large plan underperformance can be partially explained by the asset allocation difference between U.S. equities and non-u.s. equities, said Robert J. Waid, managing director, Wilshire Analytics. Large plans consistently had more equity exposure to non-u.s. equity and less exposure to U.S. equity than other categories in Wilshire TUCS. In a quarter where the Wilshire 5000 Total Market Index SM rose percent and non-u.s. measures rose less than 4 percent, this allocation difference cost large plans, he noted. 1

, February 6, 2012 Buoyed by the double digit rebound of U.S.

2 Wilshire TUCS: All Master Trusts 2011 Equity Exposure by Plan Size US Equity Allocation Non-US Equity Allocation All Plans All Plans > $1B All Plans > $5B For example, All Master Trusts had a median quarterly performance of 5.07 percent with median exposures to U.S. Equity of percent and percent in non-u.s. Equity. Large plans with assets greater than $1 billion had a median quarterly performance of 4.82 percent with median exposures to U.S. Equity of percent and percent in non-u.s. Equity. Even more telling was that very large plans, those with assets greater than $5 billion, had a median quarterly performance of 4.51 percent with median exposures to U.S. Equity of percent and percent in non-u.s. Equity, Waid stated. For all master trusts included in Wilshire TUCS, the annual median return was 1.05 percent while master trusts with greater than $1 billion in assets had a one-year median return of 1.61 percent. The largest plans with $5 billion or more tallied a median 12-month return of 1.45 percent. Looking at public pension plans, those with assets of more than $5 billion and those with greater than $1 billion saw median fourth quarter returns of 4.42 percent and 4.34 percent, respectively, and matching 2011 median returns at 0.86 percent. For the fourth quarter and the year, all public pension funds showed median returns of 5.31 percent and 1.02 percent, respectively. Among corporate plans, the returns by all plans saw median performances of 5.64 percent for the quarter and 2.00 percent for the year. In the category that includes corporate plans with assets greater than $1 billion, the median quarterly and annual returns were 5.17 percent and 2.68 percent, respectively. 2

median quarterly performance of 5.07 percent with median exposures to U.S. Equity of 36.57 percent and 11.00 percent in non-u.s. Equity. Large plans with assets greater than $1 billion had a median quarterly performance of 4.

3 Wilshire TUCS, the most widely accepted benchmark for the performance and allocation of institutional assets, includes approximately 900 plans representing nearly $3 trillion in assets. For more information about the Wilshire Trust Universe Comparison Service, please Wilshire TUCS reports the median rates of return and median asset allocation for the time periods ending December 30, 2011, as follows (returns for periods greater than one year are annualized): Trust Universe Comparison Service 2011 Fourth Quarter MEDIAN MEDIAN PERFORMANCE ALLOCATION All Master Trusts One Quarter = 5.07% US Equities = 36.57% One Year = 1.05% Intl Equities = 11.00% Three Years = 10.45% US Bonds = 31.98% Five Years = 2.15% Intl Bonds = 0.00% Ten Years = 5.19% Cash = 2.61% Alternative Investments = 0.00% Corporate Funds One Quarter = 5.64% US Equities = 37.03% One Year = 2.00% Intl Equities = 12.12% Three Years = 11.75% US Bonds = 32.97% Five Years = 2.57% Intl Bonds = 0.00% Ten Years = 5.56% Cash = 2.65% Alternative Investments = 0.33% Public Funds One Quarter = 5.31% US Equities = 38.68% One Year = 1.02% Intl Equities = 12.40% Three Years = 10.44% US Bonds = 29.34% Five Years = 2.22% Intl Bonds = 0.00% Ten Years = 5.36% Cash = 2.62% 3

Wilshire TUCS reports the median rates of return and median asset allocation for the time periods ending December 30, 2011, as follows (returns for periods greater than one year are annualized):

4 Real Estate = 1.65% Alternative Investments = 0.00% Foundations and Endowments One Quarter = 4.64% US Equities = 36.68% One Year = -0.73% Intl Equities = 16.36% Three Years = 10.41% US Bonds = 21.83% Five Years = 1.62% Intl Bonds = 0.00% Ten Years = 5.21% Cash = 2.61% Alternative Investments = 7.85% Taft Hartley Defined Benefit Plans One Quarter = 5.94% US Equities = 41.40% One Year = 0.86% Intl Equities = 8.90% Three Years = 9.61% US Bonds = 32.34% Five Years = 1.72% Intl Bonds = 0.00% Ten Years = 4.32% Cash = 3.01% Real Estate = 5.82% Alternative Investments = 3.36% Taft Hartley Health and Welfare Funds One Quarter = 2.60% US Equities = 17.94% One Year = 4.03% Intl Equities = 2.79% Three Years = 7.82% US Bonds = 73.73% Five Years = 3.89% Intl Bonds = 0.00% Ten Years = 4.39% Cash = 2.93% Alternative Investments = 0.00% All Master Trusts with Assets Greater than $1 billion One Quarter = 4.82% US Equities = 32.26% One Year = 1.61% Intl Equities = 13.67% Three Years = 10.94% US Bonds = 26.22% Five Years = 2.07% Intl Bonds = 0.96% Ten Years = 5.73% Cash = 3.12% 4

86% Intl Equities = 8.90% Three Years = 9.61% US Bonds = 32.34% Five Years = 1.72% Intl Bonds = 0.00% Ten Years = 4.32% Cash = 3.01% Real Estate = 5.82% Alternative Investments = 3.

5 Real Estate = 1.96% Alternative Investments = 10.11% Corporate Funds with Assets Greater than $1 billion One Quarter = 5.17% US Equities = 34.87% One Year = 2.68% Intl Equities = 12.51% Three Years = 11.75% US Bonds = 32.41% Five Years = 2.31% Intl Bonds = 0.70% Ten Years = 5.91% Cash = 2.79% Real Estate = 1.36% Alternative Investments = 4.11% Public Funds with Assets Greater than $1 billion One Quarter = 4.34% US Equities = 34.87% One Year = 0.86% Intl Equities = 15.11% Three Years = 10.37% US Bonds = 22.41% Five Years = 2.03% Intl Bonds = 1.91% Ten Years = 5.57% Cash = 3.22% Convertibles = 0.01% Real Estate = 3.15% Alternative Investments = 10.60% Foundations and Endowments with Assets Greater than $500 Million One Quarter = 3.60% US Equities = 26.52% One Year = 0.95% Intl Equities = 10.50% Three Years = 9.56% US Bonds = 15.24% Five Years = 2.47% Intl Bonds = 1.33% Ten Years = 5.88% Cash = 3.12% Real Estate = 1.07% Alternative Investments = 27.10% All Master Trusts with Assets Greater than $5 billion One Quarter = 4.51% US Equities = 29.50% One Year = 1.45% Intl Equities = 15.55% Three Years = 10.99% US Bonds = 22.41% Five Years = 2.04% Intl Bonds = 1.30% Ten Years = 5.86% Cash = 3.18% Convertibles = 0.01% Real Estate = 4.03% 5

11% Public Funds with Assets Greater than $1 billion One Quarter = 4.34% US Equities = 34.87% One Year = 0.86% Intl Equities = 15.11% Three Years = 10.37% US Bonds = 22.41% Five Years = 2.

6 Alternative Investments = 11.46% Public Funds with Assets Greater than $5 billion One Quarter = 4.42% US Equities = 34.87% One Year = 0.86% Intl Equities = 17.26% Three Years = 10.37% US Bonds = 22.34% Five Years = 1.92% Intl Bonds = 1.82% Ten Years = 5.52% Cash = 3.19% Convertibles = 0.01% Real Estate = 3.15% Alternative Investments = 10.60% About Wilshire Associates Wilshire Associates, a leading global independent investment consulting and services firm, provides consulting services, analytics solutions and customized investment products to plan sponsors, investment managers and financial intermediaries. Its business units include Wilshire Analytics, Wilshire Consulting, Wilshire Funds Management and Wilshire Private Markets. The firm was founded in 1972, revolutionizing the industry by pioneering the application of investment analytics and research to investment management for the institutional marketplace. Wilshire is credited with helping to develop the field of quantitative investment analysis that uses mathematical tools to analyze market risks. All other business units evolved from Wilshire's strong analytics foundation. Wilshire developed the Wilshire 5000 Total Market Index SM and became an early innovator in creating the industry's integrated asset/liability analysis/simulation models as well as the industry's practical models in risk budgeting through beta and active risk analysis. Wilshire has grown to a firm of more than 300 employees serving the investment needs of institutional clients around the world. Based in Santa Monica, California, Wilshire provides services to clients in more than 20 countries representing more than 500 organizations. With ten offices on four continents, Wilshire Associates and its affiliates are dedicated to providing clients with the highest quality counsel, products and services. Wilshire is a registered service mark of Wilshire Associates Incorporated. Please visit # # # 6

60% About Wilshire Associates Wilshire Associates, a leading global independent investment consulting and services firm, provides consulting services, analytics solutions and customized investment

2. Match or exceed Composite Index over 3 year rolling period. Composite Index Total Fund Since Inception 2.97% 2.96% Last 3 Years 9.48% 9.

2. Match or exceed Composite Index over 3 year rolling period. Composite Index Total Fund Since Inception 2.97% 2.96% Last 3 Years 9.48% 9. EXECUTIVE SUMMARY Nature of the Fund: 1. Receives tobacco settlement monies in April 2. Expect these Receipts to continue through 2025 3. Distributes monies in July according to the formula: 5% of the