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  Wilshire Trust Universe Comparison Service© Shows Falling Equity Returns Drag Down Performance of Institutional Plans in Q2 2012

Rising Bond Market Fails to Sustain First Quarter Returns

SANTA MONICA, CA, AUGUST 6, 2012—Despite a rising bond market, falling equity returns—especially international equity—proved to be a drag on the performance of all institutional plan types, according to the Wilshire Trust Universe Comparison Service® (Wilshire TUCS®), a cooperative effort between Wilshire Analytics, the investment technology unit of Wilshire Associates Incorporated (Wilshire®), and custodial organizations. Wilshire TUCS, the most widely accepted benchmark for the performance and allocation of institutional assets, includes approximately 655 plans representing nearly $2.85 trillion in assets.

“After the best quarter in one-and-one-half years, the median quarterly return for all plan types was down -1.58 percent in the second quarter,” said Robert J. Waid, managing director, Wilshire Associates. “Taft Harley Defined Benefit plans were off the most with a -1.98 percent median return while Taft Harley Health and Welfare Funds doing the best with a median return of -0.70 percent. For the year ending June 30, Corporate Plans were the best performer gaining a median return of 3.68 percent while Foundations and Endowments lagged with a 0.37 percent median return,” Waid added.

“With quarterly returns for the Wilshire 5000 Total Market IndexSM of -3.13 percent and the Wilshire Global exUS IndexSM even worse at -8.18 percent, the asset class that somewhat saved returns for the quarter and year was fixed income” Waid noted. “The Barclays U.S. Aggregate gained 2.06 percent for the quarter, but the equity/bond spread is more pronounced with the one-year numbers of 3.96 percent, -14.57 percent and 7.47 percent, respectively. With a median exposure of 34.82 percent to bonds, Corporate Plans’ median return of -0.88 percent outperformed that of Public Plans, which had a median allocation of 25.45 percent to bonds and a -1.73 percent median performance for the quarter. One-year median performances were 3.68 percent and 1.15 percent, respectively,” he concluded.

The following graph shows the difference in median allocation to U.S. Fixed Income, which can be directly tied to the performance of the plans.

For more information about the Wilshire Trust Universe Comparison Service, please e-mail TUCS@wilshire.com.

Wilshire TUCS® reports the median rates of return and median asset allocation for the time periods ending June 30, 2012, as follows (returns for periods greater than one year are annualized):

Trust Universe Comparison Service — 2012 Second Quarter

About Wilshire Associates
Wilshire Associates, a leading global, independent investment consulting and services firm, provides consulting services, analytics solutions and customized investment products to plan sponsors, investment managers and financial intermediaries. Its business units include, Wilshire Analytics, Wilshire Consulting, Wilshire Funds Management and Wilshire Private Markets.

The firm was founded in 1972, revolutionizing the industry by pioneering the application of investment analytics and research to investment management for the institutional marketplace.

Wilshire also is credited with helping to develop the field of quantitative investment analysis that uses mathematical tools to analyze market risks. All other business units evolved from Wilshire’s strong analytics foundation. Wilshire developed the Wilshire 5000 Total Market IndexSM and became an early innovator in creating the industry’s integrated asset/liability analysis/simulation models as well as the industry’s practical models in risk budgeting through beta and active risk analysis. Wilshire has grown to a firm of more than 300 employees serving the investment needs of institutional clients around the world.

Based in Santa Monica, California, Wilshire provides services to clients in more than 20 countries representing more than 500 organizations. With ten offices on four continents, Wilshire Associates and its affiliates are dedicated to providing clients with the highest quality counsel, products and services. Wilshire®, Wilshire Trust Universe Comparison Service® and Wilshire TUCS® are registered service marks of Wilshire Associates Incorporated. Wilshire 5000 Total Market IndexSM and the Wilshire Global exUS IndexSM are service marks of Wilshire Associates Incorporated. Please visit http://www.wilshire.com/.

CONTACT: Kim Shepherd | +1-773-252-9986 | kshepherd.ext@wilshire.com

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