Wilshire Credit Alternatives Portfolio

The Wilshire Credit Alternatives Portfolio is an actively managed, multi-strategy alternative investments portfolio of mutual funds with a low volatility and absolute return mandate. The portfolio allows advisors to provide their clients with risk-managed exposure to liquid alternative mutual funds:

  • Each strategy under consideration is comprehensively evaluated by Wilshire’s team of hedge fund manager research analysts utilizing a proprietary six-factor qualitative research process.
  • Qualitative and quantitative inputs are employed in the manager selection and portfolio construction processes, seeking to maximize risk-adjusted return while maintaining low correlation to traditional portfolio risk factors.
  • Wilshire’s approach to portfolio construction is grounded in a risk-optimized framework designed to maximize the benefits of diversification across a broad opportunity set of liquid alternative mutual funds.

Wilshire Associates Incorporated (“Wilshire”) has a deep heritage of advising its clients on the use of alternatives in an effort to enhance holistic portfolio solutions:

  • Wilshire has been advising its institutional clients on alternatives and recommending hedge fund solutions since 2000
  • Today, Wilshire is able to design solutions utilizing liquid alternative mutual funds for financial advisors thanks to the growing universe of high caliber investment strategies available. These strategies were previously only available to institutional and high net wealth investors
Portfolio Objectives
  • Return: 90 day T-Bill plus 2% to 4% annually
  • Risk: 2% to 4% annualized standard deviation
  • Beta: Below 0.2 versus traditional equity asset classes

There is no guarantee that any of the Portfolio Objectives will be met.

Portfolio Highlights
  1. Diversification: Seeks to provide a source of return lowly correlated to traditional portfolio risk factors.
  2. Return: Seeks to maximize absolute return by allocating to less correlated managers and strategies.
  3. Risk Management: Maintain manager and strategy diversification through rigorous monitoring of manager and portfolio risk attributes.


Allocations (%)
Relative Value JPMorgan Strategic Income Opps Select JSOSX 11.0
  Metropolitan West Unconstrained Bond Fund MWCIX 11.0
  John Hancock Strategic Income Opps Fund JIPIX 11.0
  Guggenheim Macro Opps Instl GIOIX 12.0
Global Macro Virtus Aviva Multi-Strategy Target Return I VMSIX 10.0
  AQR Managed Futures Strategy AQMIX 10.0
  Natixis ASG Managed Futures Strategy ASFYX 10.0
Event Driven BlackRock Global Long/Short Credit Fund Instl BGCIX 8.0
  Kellner Merger Fund Instl GAKIX 15.0
Cash Cash n/a 2.0


Portfolio Strategies

  • Relative Value strategies invest long and short in fixed income securities and derivatives seeking to add value through hedging or security selection.
  • Global Macro strategies invest directionally long and short across global equity, fixed income, commodity and currency markets driven by either a fundamental or a systematic approach.
  • Event Driven Credit strategies maintain positions in companies currently or prospectively involved in corporate transactions of a wide variety, expecting the idiosyncratic risk of these events to drive returns.


Important Information
This material is for information purposes only. Wilshire Funds Management (WFM) is a business unit of Wilshire Associates Incorporated that uses mathematical and statistical investment processes to allocate assets, select managers, and construct portfolios and funds in ways that seek to outperform their specific benchmarks. WFM delivers Wilshire Advisor Solutions, which include models designed to provide a broad range of outcome-oriented investment portfolios for advisors to use with their clients. Past performance does not guarantee future returns, and processes used may not achieve the desired results. Actual portfolios and results may vary. All investments involve risk including the potential loss of principal. 

Alternative investment strategies are speculative, not suitable for all clients, and intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment. 

Investments in bonds are subject to interest rate, inflation, credit, currency, and sovereign risks. Investments in high-yield bonds are subject to greater credit risk and price fluctuations than higher-quality issues. 

Investments in equities are subject to market risk so that shares, when redeemed, may be worth more or less than their original cost. Security prices can fluctuate significantly in the short term or over extended periods of time. These price fluctuations may result from factors affecting individual companies, industries, or the securities market as a whole. Investments in small-cap stocks may be subject to a higher degree of market risk than large-cap stocks, or more established companies’ securities. Furthermore, the illiquidity of the small-cap market may adversely affect the value of an investment. 

Investments in international securities involve additional risks including currency rate fluctuations, political and economic instability, differences in financial reporting standards, and less stringent regulation of securities markets. 

Investments in commodities and commodity-index-linked securities may be affected by overall market movements and other factors that affect the value of a particular industry or commodity, such as weather, disease, embargoes, or political and regulatory developments. 

Model portfolios are exposed to the specific risks of the underlying funds in direct proportion to their percentage allocation. The funds comprising the models and the allocations to those funds have changed over time and may change in the future. 

Diversification and asset allocation do not guarantee a profit, nor do they protect against loss, including the loss of principal. 

Standard Deviation:
A statistical measurement shedding light on historical volatility. For example, a volatile stock will have a high standard deviation while the deviation of a more stable stock will be lower. 
Beta: A measure of volatility or systematic risk, of a security or a portfolio in comparison to the market as a whole. A beta of 1 indicates that the portfolio’s value will move with the market. A beta of less than 1 means that the portfolio’s value will be less volatile than the market. 

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. 

Copyright © 2019 Wilshire Associates Incorporated. All rights reserved. Information in this document is subject to change without notice. 

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