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  January 2018 Monthly Market Commentary

U.S. Economy and Markets

  • Domestic equity markets continued to be positive in January, as the Wilshire 5000 Total Market IndexSM returned 5.25% and the S&P 500 Index advanced 5.73%.
  • Market volatility picked up significantly in January, as the CBOE Volatility Index (VIX) ended the month at 13.54, an increase from its December close of 11.04.
  • Performance across GICS sectors was positive for the month, with the Consumer Discretionary and Information Technology sectors leading the group, gaining 8.45% and 7.64%, respectively. On the other hand, more interest rate sensitive sectors like Utilities and Real Estate trailed the group in January, dropping -3.16% and -2.82%, respectively.
  • 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 5.55% and 2.43%, respectively.
  • The Housing Market Index preliminary reading for January registered at 72, a decline from Decembers’ 18-year high reading of 74.

International Economy and Markets

  • International markets, as measured by the MSCI EAFE Index, advanced 5.02%. Emerging markets also delivered strong gains in January, with the MSCI Emerging Markets Index increasing 8.33%.
  • Asian markets continued to build on their positive momentum with the MSCI Japan Index returning 4.58% and the MSCI Pacific Index advancing 4.34%.

Fixed Income/Real Estate/Commodities

  • The 10-year U.S. Treasury yield rose again this month, ending January at 2.72%, up from 2.58% in December.
  • The Bloomberg Barclays Long-Term Treasury Index declined -3.23% and the Bloomberg Barclays U.S. TIPS Index was down -0.86% for the month.
  • The Bloomberg Barclays U.S. Aggregate Index declined -1.15% in January.
  • U.S. real estate posted negative returns in January, with the Wilshire U.S. Real Estate Securities IndexSM falling -3.77%. In contrast, international real estate securities posted positive returns, with the Wilshire Global ex U.S. Real Estate Securities IndexSM rising 3.61%.
  • Commodities posted positive returns in January, with the Bloomberg Commodity Index advancing 1.99%.

Alternatives

  • The Wilshire Liquid Alternatives IndexSM returned 1.57% in January. The Global Macro and Equity Hedge indices were the best performers during the month, with the Wilshire Liquid Alternative Global Macro IndexSM advancing 2.74% and Wilshire Liquid Alternative Equity Hedge IndexSM gaining 2.52%.
  • The Wilshire Liquid Alternative Relative Value IndexSM lagged, gaining 0.59%.

GICS Sector Returns*

Wilshire 5000 Index
As of 1/31/2018
MTD (%) QTD (%) YTD (%) 1 Year (%)
Consumer Discretionary 8.45 8.45 8.45 28.49
Consumer Staples 1.66 1.66 1.66 13.10
Energy 3.25 3.25 3.25 4.79
Financials 5.72 5.72 5.72 26.80
Health Care 6.64 6.64 6.64 28.33
Industrials 4.81 4.81 4.81 25.90
Information Technology 7.64 7.64 7.64 41.95
Materials 3.48 3.48 3.48 22.20
Real Estate -2.82 -2.82 -2.82 5.83
Telecommunications Services 0.54 0.54 0.54 2.12
Utilities -3.16 -3.16 -3.16 7.79

*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 5.25 5.25 5.25 25.12
Standard & Poor’s 500 5.73 5.73 5.73 26.41
Standard & Poor’s/TSX (CAD) 3.03 3.03 3.03 19.16

U.S. Equity by Size/Style

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire U.S. Large Cap IndexSM 5.55 5.55 5.55 26.20
Wilshire U.S. Large Cap Growth IndexSM 7.21 7.21 7.21 32.74
Wilshire U.S. Large Cap Value IndexSM 3.89 3.89 3.89 20.02
Wilshire U.S. Small Cap IndexSM 2.43 2.43 2.43 15.33
Wilshire U.S. Small Cap Growth IndexSM 3.95 3.95 3.95 22.49
Wilshire U.S. Small Cap Value IndexSM 0.89 0.89 0.89 8.32
Wilshire U.S. Micro Cap IndexSM 0.96 0.96 0.96 17.97

International Equity (USD)

  MTD (%) QTD (%) YTD (%) 1 Year (%)
MSCI AC World ex U.S. 5.57 5.57 5.57 29.68
MSCI EAFE 5.02 5.02 5.02 27.60
MSCI Europe 5.40 5.40 5.40 29.60
MSCI Pacific 4.34 4.34 4.34 24.59
MSCI Japan 4.58 4.58 4.58 25.02
MSCI EM (Emerging Markets) 8.33 8.33 8.33 41.01

International Equity (Local Currency)

  MTD (%) QTD (%) YTD (%) 1 Year (%)
MSCI AC World ex U.S. 2.41 2.41 2.41 19.86
MSCI EAFE 1.20 1.20 1.20 16.50
MSCI Europe 1.08 1.08 1.08 14.66
MSCI Pacific 1.39 1.39 1.39 20.32
MSCI Japan 1.34 1.34 1.34 21.22
MSCI EM (Emerging Markets) 6.77 6.77 6.77 34.06

North American Fixed Income

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Bloomberg Barclays U.S. Aggregate -1.15 -1.15 -1.15 2.15
Bloomberg Barclays Long-Term Treasury -3.23 -3.23 -3.23 4.62
Bloomberg Barclays U.S. TIPS -0.86 -0.86 -0.86 1.27
Bloomberg Barclays U.S. Credit -0.93 -0.93 -0.93 4.84
Bloomberg Barclays Corporate High Yield 0.60 0.60 0.60 6.60

International Fixed Income

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Bloomberg Barclays Global Aggregate (Unhedged) 1.19 1.19 1.19 7.46
Bloomberg Barclays Global Aggregate (Hedged) -0.71 -0.71 -0.71 2.67
JPM EMBI Plus -0.50 -0.50 -0.50 6.20

Real Estate/Commodities/Alternatives

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire U.S. Real Estate Securities IndexSM  -3.77 -3.77 -3.77 1.28
Wilshire Global ex U.S. Real Estate Securities IndexSM  3.61 3.61 3.61 21.94
Wilshire Global Real Estate Securities IndexSM  -1.14 -1.14 -1.14 8.15
S&P GSCI Commodity (S&P GSCI)  3.42 3.42 3.42 10.95
Bloomberg Commodity Index  1.99 1.99 1.99 3.58
Wilshire Liquid Alternatives IndexSM  1.57 1.57 1.57 6.10
Wilshire Liquid Alternative Equity Hedge IndexSM  2.52 2.52 2.52 9.40
Wilshire Liquid Alternative Event Driven IndexSM  0.86 0.86 0.86 3.29
Wilshire Liquid Alternative Global Macro IndexSM  2.74 2.74 2.74 7.33
Wilshire Liquid Alternative Multi-strategy IndexSM  1.54 1.54 1.54 7.97
Wilshire Liquid Alternative Relative Value IndexSM 0.59 0.59 0.59 3.24
Wilshire Focused Liquid Alternative IndexSM 1.62 1.62 1.62 6.00

*Returns are as of January 31, 2018. 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 is a business unit of Wilshire Associates Incorporated (“Wilshire®”). 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.

180225 WAS E0318

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