Knowledge Center

SANTA MONICA, CA, JULY 11, 2017—The Wilshire Liquid Alternative Index^SM returned -0.02% in June, slightly underperforming the 0.03% return of the HFRX Global Hedge Fund Index.

SANTA MONICA, CA, JUNE 13, 2017—The Wilshire Liquid Alternative Index^SM returned 0.34% in May, outperforming the 0.24% monthly return of the HFRX Global Hedge Fund Index.

U.S. Economy and Markets: Domestic equity markets were positive in May, as the Wilshire 5000 Total Market Index returned 1.00% and the S&P 500 Index returned 1.41%.

SANTA MONICA, CA, MAY 10, 2017—The Wilshire Liquid Alternative Index^SM returned 0.34% in April, underperforming the 0.42% monthly return of the HFRX Global Hedge Fund Index. 

U.S. Economy and Markets

• Domestic equity markets were positive in April, as the Wilshire 5000 Total Market Index^SM returned 1.05% and the S&P 500 Index returned 1.03%.
• Market volatility, measured by the CBOE Volatility Index (VIX), ended the month at 10.82, a decrease from its March close of 12.37.
• Performance across GICS sectors was mixed for the month, with the Consumer Discretionary and Information Technology sectors leading the group, returning 2.59% and 2.48%, respectively. On the other hand, the Energy sector was the worst performing sector in April, falling -3.36%.
• Large cap stocks outperformed their small cap counterparts this month, with the Wilshire U.S. Large Cap Index^SM and the Wilshire U.S. Small Cap Index^SM returning 1.06% and 0.98%, respectively.
• U.S. manufacturing activity, as measured by the Institute for Supply Management’s PMI, registered 54.8% in April, down from the March reading of 57.2%. Generally, a reading above 50% indicates expansion.

Investment Strategy—Positioning for Relative Opportunities

Global equity markets continued to climb higher early in the first quarter of 2017, on momentum and positive sentiment in response to the surprise election of Donald Trump. The market had been pricing in optimism regarding the new administration’s ability to execute on its policy agenda of lighter regulation and looser fiscal policy. However, markets were met with resistance mid-quarter on the heels of a failed health care vote and the realization that future policy actions may be less certain. We expressed our concern in our last letter that there remains significant uncertainty regarding actual policy implementation, noting that our analysis continues to focus on the fundamentals of the macroeconomic landscape, while considering how such fundamentals may change in response to policy actions.

Webinar Replay: 2017 First Quarter Market Update webinar, presented by Josh Emanuel, Wilshire Funds Management CIO.

The U.S. Equity Market: The U.S. stock market, represented by the Wilshire 5000 Total Market Index^SM, was up 5.61% for the first quarter of 2017. The market has been trending generally upward for more than a year now, including six straight quarterly gains. Economic releases during the quarter were strong and markets took comfort in both the Federal Reserve’s 0.25% increase in the overnight rate and its accompanying statement. Despite accelerating price increases, the Fed’s forecast for the Fed Funds rate at year-end 2017 was little changed from their December meeting.

SANTA MONICA, CA, MARCH 10, 2017—The Wilshire Liquid Alternative Index^SM returned 0.75% in February, underperforming the 1.12% monthly return for the HFRX Global Hedge Fund Index. 

Domestic equity markets set multiple record highs in February, as the Wilshire 5000 Total Market Index^SM returned 3.72% and the S&P 500 Index returned 3.97%. Market volatility, measured by the CBOE Volatility Index (VIX), ended the month at 12.92, an increase from its January close of 11.99.