Knowledge Center

We are not in the business of forecasting politics, but we are closely monitoring the actions and announcements from the Trump administration for clarity regarding the actual implementation of his proposed policy actions. Furthermore, we continue to objectively monitor a broad range of market fundamentals, and we are specifically focused on several factors in formulating our forward-looking views within the scope of the Trump administration.

Investment Strategy—Defensively Seeking Returns: Global equity markets delivered compelling returns in the third quarter of 2016, following a decline in equities late in the second quarter. Investors have continued to take advantage of price declines in equities throughout 2015 and 2016, shrugging off geopolitical concerns, slower economic growth and inflation, and a deterioration in earnings growth. The persistent support for equities is both technically encouraging and fundamentally concerning, as it may serve as a sign of investor complacency.

SANTA MONICA, CA, NOVEMBER 10, 2016—The Wilshire Liquid Alternative Index^SM returned -0.32% in October, outperforming the -0.57% return for the HFRX Global Hedge Fund Index.

U.S. Economy and Markets: Domestic equity markets were negative in October, as the Wilshire 5000 Total Market Index^SM returned -2.03% and the S&P 500 Index returned -1.82%. Market volatility increased in October, with the CBOE Volatility Index (VIX) ending the month at 17.06, up from 13.29 at the end of September 2016.

Webinar Replay: Third Quarter 2016 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, was up for the third quarter of 2016 by 4.29%. This marks the fourth straight quarterly gain, although most of the pricing activity occurred during roughly the first dozen trading days of the quarter. Interestingly, strong equity returns this year have coincided with a drop in corporate earnings. However, a major contributor to that decline is performance within the Energy sector due to depressed oil prices.

SANTA MONICA, CA, OCTOBER 11, 2016—The Wilshire Liquid Alternative Index^SM returned 0.11% in September, underperforming the HFRX Global Hedge Fund Index’s 0.55% return.

Past performance does not guarantee future results. Mutual fund investors are all too familiar with these ubiquitous words. Yet despite the disclaimer, investors consistently turn to a fund’s past performance when making investment decisions. Does this approach make sense?

SANTA MONICA, CA, SEPTEMBER 12, 2016—The Wilshire Liquid Alternative Index^SM returned 0.11% in August, underperforming the HFRX Global Hedge Fund Index’s 0.16% return by 5 basis points.

U.S. Economy and Markets: Domestic equity markets were positive in August, as the Wilshire 5000 Total Market Index^SM returned 0.25% and the S&P 500 Index returned 0.14%. Market volatility increased in August, with the CBOE Volatility Index (VIX) ending the month at 13.07, up from 11.87 at the end of July 2016. Performance across GICS sectors was mixed for the month, with the Financials and Information Technology sectors leading the group, returning 3.31% and 2.06%, respectively. On the other hand, Utilities was the worst performing sector in August, falling -5.41%. Small cap stocks outperformed their large cap counterparts this month, with the Wilshire U.S. Large Cap Index^SM and the Wilshire U.S. Small Cap Index^SM returning 0.14% and 1.25%, respectively. U.S. manufacturing activity, as measured by the Institute for Supply Management’s PMI, registered 49.4% in August, down from the July reading of 52.6%. Generally a reading above 50% indicates expansion.