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  July 2017 Monthly Market Commentary

U.S. Economy and Markets

  • Domestic equity markets were positive in July, as the Wilshire 5000 Total Market IndexSM returned 1.88% and the S&P 500 Index returned 2.06%.
  • Market volatility, measured by the CBOE Volatility Index (VIX), ended the month at 10.26, a decrease from its June close of 11.18.
  • Performance across GICS sectors was positive for the month, with the Telecommunications Services and Information Technology sectors leading the group, returning 5.87% and 4.09%, respectively. On the other hand, the Industrials sector was the worst performing sector in July, returning 0.22%.
  • 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 1.98% and 1.08%, respectively.
  • U.S. manufacturing activity, as measured by the Institute for Supply Management’s PMI, registered 56.3% in July, down from the June reading of 57.8%. June’s was the highest since August 2014. Generally, a reading above 50% indicates expansion.

International Economy and Markets

  • International markets continued to rally in July, as the MSCI EAFE Index returned 2.88%. Emerging markets posted even stronger returns in July than in June, with the MSCI Emerging Markets Index returning 6.02%.
  • Developed international equity market returns were broadly positive in July. The MSCI Europe Index returned 2.99% in U.S. dollar terms, while the MSCI Japan Index trailed the pack, gaining 2.02% for the month.

Fixed Income/Real Estate/Commodities

  • The 10-year U.S. Treasury yield was down one basis points from June, ending July at 2.30%.
  • U.S. bond sectors posted mostly positive returns in July, with the broad Bloomberg Barclays U.S. Aggregate Bond Index returning 0.43%. The Bloomberg Barclays Corporate High Yield Index returned 1.11% for the month.
  • U.S. real estate was strong in July, with the Wilshire U.S. Real Estate Securities IndexSM returning 1.11%. Global real estate securities posted positive returns, with the Wilshire Global ex U.S. Real Estate Securities IndexSM returning 3.30%.
  • Commodities posted positive returns in July, with the Bloomberg Commodity Index returning 2.26%.

Alternatives

  • The Wilshire Liquid Alternatives IndexSM returned 0.67% for the month of July. Equity Hedge turned in the best monthly performance, with the Wilshire Liquid Alternative Equity Hedge IndexSM returning 0.97%.
  • The Wilshire Liquid Alternative Event Driven IndexSM lagged the pack, returning 0.26%.

GICS Sector Returns*

As of 7/31/2017 MTD (%) QTD (%) YTD (%) 1 Year (%)
Consumer Discretionary 1.62 1.62 13.01 15.19
Consumer Staples 0.60 0.60 7.86 4.19
Energy 2.29 2.29 -11.25 0.23
Financials 1.67 1.67 7.42 24.72
Health Care 0.67 0.67 17.35 9.64
Industrials 0.22 0.22 8.90 19.14
Information Technology 4.09 4.09 21.39 28.84
Materials 1.11 1.11 10.61 15.20
Real Estate 1.32 1.32 5.97 -
Telecomm 5.87 5.87 -3.74 -4.06
Utilities 2.52 2.52 11.23 6.55
*Wilshire 5000 Total Market IndexSM. Source: Wilshire AtlasSM Note: Index returns are preliminary and are subject to revision.

North American Equity

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire 5000 Total Market IndexSM 1.88 1.88 10.77 16.21
Standard & Poor’s 500 2.06 2.06 11.59 16.04
Standard & Poor’s/TSX (CAD) -0.06 -0.06 0.67 6.81

U.S. Equity by Size/Style

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire U.S. Large Cap IndexSM 1.98 1.98 11.43 16.24
Wilshire U.S. Large Cap Growth IndexSM 2.61 2.61 16.28 22.36
Wilshire U.S. Large Cap Value IndexSM 1.34 1.34 6.84 10.53
Wilshire U.S. Small Cap IndexSM 1.08 1.08 5.07 15.97
Wilshire U.S. Small Cap Growth IndexSM 1.13 1.13 8.82 20.54
Wilshire U.S. Small Cap Value IndexSM 1.01 1.01 1.27 11.46
Wilshire U.S. Micro Cap IndexSM -0.45 -0.45 5.03 21.85

International Equity (USD)

  MTD (%) QTD (%) YTD (%) 1 Year (%)
MSCI AC World ex U.S. 3.69 3.69 18.30 19.01
MSCI EAFE 2.88 2.88 17.09 17.77
MSCI Europe 2.99 2.99 18.80 19.71
MSCI Pacific 2.79 2.79 14.21 14.96
MSCI Japan 2.02 2.02 12.14 14.19
MSCI EM (Emerging Markets) 6.02 6.02 25.49 24.84

International Equity (Local Currency)

  MTD (%) QTD (%) YTD (%) 1 Year (%)
MSCI AC World ex U.S. 1.64 1.64 10.45 17.92
MSCI EAFE 0.67 0.67 8.27 17.36
MSCI Europe 0.62 0.62 8.58 16.32
MSCI Pacific 0.80 0.80 7.87 19.79
MSCI Japan 0.33 0.33 6.24 23.11
MSCI EM (Emerging Markets) 4.89 4.89 20.45 22.53

North American Fixed Income

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Bloomberg Barclays U.S. Aggregate 0.43 0.43 2.71 -0.51
Bloomberg Barclays Long-Term Treasury -0.62 -0.62 4.76 -9.82
Bloomberg Barclays U.S. TIPS 0.45 0.45 1.30 -1.04
Bloomberg Barclays U.S. Credit 0.73 0.73 4.44 1.26
Bloomberg Barclays Corporate High Yield 1.11 1.11 6.09 10.95

International Fixed Income

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Bloomberg Barclays Global Aggregate (Unhedged) 1.68 1.68 6.16 -1.28
Bloomberg Barclays Global Aggregate (Hedged) 0.33 0.33 1.76 -0.68
JPM EMBI Plus 0.41 0.41 6.71 3.29

Real Estate/Commodities/Alternatives

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire U.S. Real Estate Securities IndexSM  1.11 1.11 3.56 -4.02
Wilshire Global ex U.S. Real Estate Securities IndexSM  3.30 3.30 14.44 4.88
Wilshire Global Real Estate Securities IndexSM  1.86 1.86 7.14 -1.06
S&P GSCI Commodity (S&P GSCI)  4.58 4.58 -6.12 5.23
Bloomberg Commodity Index  2.26 2.26 -3.11 0.77
Wilshire Liquid Alternatives IndexSM  0.67 0.67 2.77 3.02
Wilshire Liquid Alternative Equity Hedge IndexSM  0.97 0.97 3.64 5.52
Wilshire Liquid Alternative Event Driven IndexSM  0.26 0.26 2.29 3.95
Wilshire Liquid Alternative Global Macro IndexSM  -0.64 -0.64 0.77 -3.33
Wilshire Liquid Alternative Multi-strategy IndexSM  0.80 0.80 4.18 4.14
Wilshire Liquid Alternative Relative Value IndexSM 0.50 0.50 2.66 3.85
Wilshire Focused Liquid Alternative IndexSM 0.65 0.65 2.63 2.67

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

Note: Index returns are preliminary and are subject to revision.

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.

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.

1708015 WAS E0917

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