Knowledge Center

The Wilshire Advisor Solutions Knowledge Center contains our video presentations, white papers, monthly and quarterly market commentaries, and product literature.

  Wilshire Funds Management Investment Strategy Update - 7/2020

Global financial markets rallied during the second quarter, marking the best quarterly performance for U.S. equities in decades, as investor sentiment rose on the coattails of swift and substantial government stimulus and intervention. The Fed’s immediate actions to cut the Fed Funds Target Rate and provide support to fixed income markets through outright purchases of assets, and by supporting short-term funding markets, successfully led to a decline in risk and recovery in asset prices. Despite the recent recovery in equities and the coinciding expansion in earnings multiples, equities are not necessarily expensive relative to history, provided that bond yields remain low. Although the future remains somewhat clouded with economic and political uncertainty, the hard and soft economic data continues to indicate a notable improvement in the latter half of the second quarter.

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  Wilshire Funds Management Investment Strategy Update - 4/2020

Following a strong start for risk assets in 2020, the market environment changed significantly in mid-February as it became clear that the spread of COVID-19 was beginning to evolve into a global pandemic, thereby increasing the risk to the global economy and financial markets. Over the course of just one month (2/19/20 – 3/23/20), global risk assets experienced a spike in volatility that coincided with deleveraging across financial markets. This risk was exacerbated by an oil war between Saudi Arabia and Russia, which sent energy markets into a tailspin, triggering an extraordinary deleveraging cycle.

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  Wilshire Funds Management Investment Strategy Update - 2/2020

Global risk assets finished 2019 with strong positive momentum. Economic data continues to exhibit signs of improvement, particularly with respect to the U.S. consumer, as Consumer Sentiment and Retail Sales surprised to the upside. Globally, the economic data has also shown some signs of stability, as growth and inflation in Japan are picking up, economic growth in South Korea outperformed expectations, and German manufacturing showed some signs of potential bottoming.

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  Investment Strategy Update, May 2019

Global Equities Rally: Global equities have rallied off the lows of December 2018, particularly U.S. equities, which have reached new highs. While the initial recovery was driven by attractive valuations, the dovish tone of global central banks has been supportive of equities moving higher as the interest rate tightening cycle has ended. This has resulted in a significant decline in global government bond yields. While lower bond yields are supportive of the equity risk premium on a global basis, the bond market and the equity market are sending contrasting signals. Bonds are pricing in much slower growth and inflation, and equities are pricing in optimistic expectations of future earnings growth, specifically in the U.S.

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  Investment Strategy Update, February 2019

Discipline Outperforms Emotion: Global investor sentiment deteriorated in the fourth quarter of 2018, and the trend lower in risk assets escalated during the month of December as restrictive monetary policy began to weigh on sentiment and risk. Over the past two years, the Federal Reserve has been gradually and judiciously implementing a path to raising interest rates as the economy has demonstrated signs of stable economic growth. In 2018, the U.S. economy largely benefited from sizable tax cuts, predominantly in corporate taxes, which not only boosted corporate earnings but facilitated strong economic growth. It has yet to be seen, however, if the benefit of lower taxes will persist into 2019 and beyond, particularly in the face of tighter monetary policy.

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  Investment Strategy Update, November 2018

Positioning for Volatility: Global investor sentiment began to moderate during the third quarter of 2018, particularly in the U.S., as growth equities rallied on strong earnings expectations and positive economic momentum supported demand for risk assets. Concerns about strong economic growth and inflationary pressures fueled a surge in bond yields late in the quarter, weighing on the rally for momentum stocks witnessed for most of the year and resulting in a meaningful correction in October. Enthusiasm about the new U.S. administration’s execution on tax reform and the immediate impact on the economy and corporate earnings continues to be clouded by concerns about trade policy.

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  Investment Strategy Update, August 2018

Shortening Duration and Seeking Opportunity in Value, International: This quarter, we are remaining overweight to foreign equities, which we reduced early in the second quarter due to concerns about the headwinds of dollar strength, and slowing business momentum overseas. We remain consistent in our slightly cautious risk posture, favoring government bonds in our fixed income allocation and value in our equity allocation.

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  Investment Strategy Update, May 2018

Positioning Defensively in Fixed Income and Equities: Global equity markets witnessed a dramatic spike in realized and implied market volatility during the first quarter of 2018, as sentiment quickly shifted on concerns of higher inflation (most notably wage inflation) and a higher likelihood of more interest rate hikes in 2018. 

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