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  August 2017 Monthly Market Commentary

U.S. Economy and Markets

  • Domestic equity markets were positive in August, as the Wilshire 5000 Total Market IndexSM returned 0.24% and the S&P 500 Index returned 0.31%.
  • Market volatility, measured by the CBOE Volatility Index (VIX), ended the month at 10.59, an increase from its July close of 10.26
  • Performance across GICS sectors was mixed for the month, with the Information Technology and Utilities sectors leading the group, gaining 3.28% and 3.08%, respectively. On the other hand, the Energy sector was the worst performing sector in August, returning -5.27%.
  • Large cap stocks continued to outperform their small cap counterparts this month, with the Wilshire U.S. Large Cap IndexSM and the Wilshire U.S. Small Cap IndexSM returning 0.41% and -1.39%, respectively.
  • U.S. manufacturing activity, as measured by the Institute for Supply Management’s PMI, registered 58.8% in August, the 12th straight month of growth (over 50%) in the manufacturing sector. This is the highest reading since April 2011.

International Economy and Markets

  • International markets were nearly flat in August, as the MSCI EAFE Index declined -0.04%. Emerging markets continued with strong returns in August, with the MSCI Emerging Markets Index gaining 2.23%.
  • Developed international equity market returns were modestly positive in August. The MSCI Europe Index gained 0.06% in U.S. dollar terms, while the MSCI Japan Index continued to trail the pack, declining -0.05% for the month.

Fixed Income/Real Estate/Commodities

  • The 10-year U.S. Treasury yield continued to fall, ending August at 2.12%, down from 2.30% in July.
  • U.S. government bonds continued to post positive returns in August, with the Bloomberg Barclays Long-Term Treasury Index returning 3.43% and the Bloomberg Barclays U.S. TIPS Index returning 1.06%.
  • Core bonds continued to rally, with the Bloomberg Barclays U.S. Aggregate Index advancing 0.90% in August.
  • U.S. real estate was weak in August, with the Wilshire U.S. Real Estate Securities IndexSM dropping -0.40%. Global real estate securities also posted negative returns, with the Wilshire Global ex U.S. Real Estate Securities IndexSM falling -0.27%.
  • Commodities continued to post positive returns in August, with the Bloomberg Commodity Index gaining 0.40%.

Alternatives

  • The Wilshire Liquid Alternatives IndexSM returned 0.37% for the month of August. Multi-Strategy and Global Macro turned in the best monthly performance, with the Wilshire Liquid Alternative Multi-Strategy IndexSM advancing 0.67% and the Wilshire Liquid Alternative Global Macro IndexSM advancing 0.64%.
  • The Wilshire Liquid Alternative Event Driven IndexSM continued to lag the pack, returning -0.31%.

GICS Sector Returns*

Wilshire 5000 Index
As of 8/31/2017
MTD (%) QTD (%) YTD (%) 1 Year (%)
Consumer Discretionary -1.75 -0.16 11.04 14.16
Consumer Staples -1.12 -0.49 6.69 3.61
Energy -5.27 -3.15 -15.75 -6.37
Financials -1.72 -0.09 5.50 24.69
Health Care 2.24 2.93 20.00 15.94
Industrials 0.15 0.37 8.97 17.97
Information Technology 3.28 7.50 25.41 30.43
Materials 0.97 2.10 11.58 16.60
Real Estate 0.42 1.72 6.30 1.51
Telecommunications Services -2.22 3.51 -5.52 -0.55
Utilities 3.08 5.63 14.61 16.07

*GICS Sector returns for the Wilshire 5000 Total Market IndexSM. Source: Wilshire AtlasSM.

North American Equity

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire 5000 Total Market IndexSM 0.24 2.13 11.04 16.20
Standard & Poor’s 500 0.31 2.37 11.93 16.23
Standard & Poor’s/TSX (CAD) 0.67 0.61 1.35 7.23

U.S. Equity by Size/Style

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire U.S. Large Cap IndexSM 0.41 2.40 11.89 16.56
Wilshire U.S. Large Cap Growth IndexSM 1.08 3.72 17.53 22.77
Wilshire U.S. Large Cap Value IndexSM -0.27 1.07 6.55 10.71
Wilshire U.S. Small Cap IndexSM -1.39 -0.33 3.61 12.95
Wilshire U.S. Small Cap Growth IndexSM -0.52 0.60 8.25 17.62
Wilshire U.S. Small Cap Value IndexSM -2.31 -1.32 -1.07 8.27
Wilshire U.S. Micro Cap IndexSM -1.04 -1.49 3.93 17.69

International Equity (USD)

  MTD (%) QTD (%) YTD (%) 1 Year (%)
MSCI AC World ex U.S. 0.52 4.23 18.92 18.88
MSCI EAFE -0.04 2.85 17.05 17.64
MSCI Europe 0.06 3.05 18.87 19.43
MSCI Pacific 0.05 2.85 14.28 15.31
MSCI Japan -0.05 1.97 12.09 13.69
MSCI EM (Emerging Markets) 2.23 8.39 28.29 24.53

International Equity (Local Currency)

  MTD (%) QTD (%) YTD (%) 1 Year (%)
MSCI AC World ex U.S. 0.51 2.16 11.02 16.95
MSCI EAFE -0.04 0.64 8.23 16.22
MSCI Europe 0.10 0.72 8.69 15.09
MSCI Pacific -0.03 0.77 7.83 18.98
MSCI Japan -0.45 -0.12 5.77 20.98
MSCI EM (Emerging Markets) 2.11 7.10 22.99 21.75

North American Fixed Income

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Bloomberg Barclays U.S. Aggregate 0.90 1.33 3.64 0.49
Bloomberg Barclays Long-Term Treasury 3.43 2.80 8.36 -5.82
Bloomberg Barclays U.S. TIPS 1.06 1.51 2.38 0.46
Bloomberg Barclays U.S. Credit 0.84 1.57 5.31 1.90
Bloomberg Barclays Corporate High Yield -0.04 1.07 6.05 8.63

International Fixed Income

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Bloomberg Barclays Global Aggregate (Unhedged) 0.99 2.69 7.22 0.19
Bloomberg Barclays Global Aggregate (Hedged) 0.91 1.24 2.69 0.28
JPM EMBI Plus 1.92 2.34 8.75 3.45

Real Estate/Commodities/Alternatives

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire U.S. Real Estate Securities IndexSM  -0.40 0.71 3.15 -1.30
Wilshire Global ex U.S. Real Estate Securities IndexSM  -0.27 3.03 14.13 5.97
Wilshire Global Real Estate Securities IndexSM  -0.29 1.50 6.76 1.13
S&P GSCI Commodity (S&P GSCI)  -0.78 3.77 -6.85 2.60
Bloomberg Commodity Index  0.40 2.67 -2.72 2.99
Wilshire Liquid Alternatives IndexSM  0.37 1.04 3.15 3.26
Wilshire Liquid Alternative Equity Hedge IndexSM  0.35 1.33 4.00 5.99
Wilshire Liquid Alternative Event Driven IndexSM  -0.31 -0.05 1.97 2.96
Wilshire Liquid Alternative Global Macro IndexSM  0.64 1.29 1.41 -1.62
Wilshire Liquid Alternative Multi-strategy IndexSM  0.67 1.47 4.87 4.81
Wilshire Liquid Alternative Relative Value IndexSM 0.24 0.74 2.91 3.22
Wilshire Focused Liquid Alternative IndexSM 0.27 0.92 2.91 2.84

*Returns are as of August 31, 2017. Source: Wilshire CompassSM

The Wilshire Indexes are calculated and distributed by Wilshire Associates Incorporated (“Wilshire”). The indices do not represent an investment. It is not possible to invest directly in an index. Exposure to an asset class represented by an index may be available through investable instruments derived from that index. Wilshire makes no representations regarding the advisability of investing in investment products based on the Wilshire Indexes not sponsored, endorsed, sold, or promoted by Wilshire. Index returns do not reflect payment of certain sales charges or fees an investor may pay to purchase the securities underlying the Index or investment vehicles intended to track the performance of the Index. The imposition of these fees and charges would cause actual performance of the securities/vehicles to be lower than the Index performance shown. Inclusion of a company in the Wilshire Indexes does not in any way reflect an opinion of Wilshire on the investment merits of the company. Index returns are preliminary and are subject to revision.

The information from third parties contained herein has been obtained from sources believed to be reliable. Wilshire Funds Management gives no representations or warranties as to the accuracy of such information, and accepts no responsibility or liability (including for indirect, consequential, or incidental damages) for any error, omission, or inaccuracy in such information and for results obtained from its use. Wilshire Funds Management (“WFM”) is a business unit of Wilshire Associates Incorporated (“Wilshire®”). WFM delivers Wilshire Advisor Solutions, which include models designed to provide a broad range of outcome-oriented investment solutions for advisors to use with their clients. Wilshire is a registered service mark of Wilshire Associates Incorporated, Santa Monica, California. All other trade names, trademarks, and/or service marks are the property of their respective holders.

170913 WAS E1017

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Replay Now Available!

2017 Third Quarter Market Update
  • Presented by: Josh Emanuel, CIO, Wilshire Funds Management
  • Date: Wed., Oct. 18, 2017