Institutional Plans Show Positive 3Q Returns

Solid equity and active bond performance made for a strong third quarter for all institutional plan types above the lower 5th percentile showing positive returns, according to the Wilshire Trust Universe Comparison Service (Wilshire TUCS).

The third quarter performance spread for median plan returns types was a narrow 0.18% except for the low outlier of the conservative Taft Hartley Health and Welfare Funds with a 3.60% median return. Public plans narrowly took top billing for the quarter with a median return of 4.67% beating Taft Hartley defined benefit plans’ and corporate funds’ 4.62% and 4.61% median returns, respectively.

“Powered by a 29.89% 12-month return by the equity market as represented by the Wilshire 5000 Total Market Index, all plan types achieved double digit median returns for the year ending September 30,” Robert J. Waid, managing director, Wilshire Associates said. “An impressive median return of 17.52% by corporate plans with assets greater than $1 billion topped the list with Taft Hartley Health and Welfare Funds bringing up the rear with a median performance of 12.04% for the 12-month period,” he added.

“Most of the plan categories had a better third quarter than the 4.32% achieved by the classic 60/40 asset allocation model,” noted Waid. “The outperformance can be attributed to the active bond manager outperformance with median and average U.S. bond performance of 2.57% and 2.67%, respectively, return versus the benchmark return of 1.58%. However, the one-year active bond manager outperformance of 8.45% and 8.70% median and mean return, respectively, versus the benchmark of 5.16% had median plan returns underperform the classic 60/40 asset allocation return of 20%.”

Wilshire TUCS, a benchmark for the performance and allocation of institutional assets, includes more than 1,500 plans representing in excess of $2.9 trillion in assets.