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  October 2017 Monthly Market Commentary

U.S. Economy and Markets

  • Domestic equity markets were positive in October, as the Wilshire 5000 Total Market IndexSM returned 2.15% and the S&P 500 Index returned 2.33%.
  • Market volatility, measured by the CBOE Volatility Index (VIX), ended the month at 10.20, an increase from its September close of 9.51.
  • Performance across GICS sectors was mostly positive for the month, with the Information Technology and Utilities sectors leading the group, gaining 7.41% and 4.11%, respectively. On the other hand, the Telecommunication Services and Consumer Staples sectors were the worst performing sectors in October, declining -6.95% and -1.31%, respectively.
  • Large cap stocks continued to outperform their small cap counterparts this month, with the Wilshire U.S. Large Cap IndexSM and the Wilshire U.S. Small Cap IndexSM returning 2.31% and 0.76%, respectively.
  • The U.S. economy continued to strengthen in October, adding 261,000 non-farm payroll jobs. The unemployment rate fell to 4.1%, its lowest reading since December 2000.

International Economy and Markets

  • International markets, as measured by the MSCI EAFE Index, returned 1.52%. Emerging markets delivered strong returns in October, with the MSCI Emerging Markets Index gaining 3.51%.
  • Developed international equity market returns were positive in October. The MSCI Japan Index returned 4.61% in U.S. dollar terms and the MSCI Europe Index advanced 0.47% for the month.

Fixed Income/Real Estate/Commodities

  • The 10-year U.S. Treasury yield rose this month, ending October at 2.38%, up from 2.33% in September.
  • The Bloomberg Barclays Long-Term Treasury Index declined -0.08% and the Bloomberg Barclays U.S. TIPS Index returned 0.21%.
  • Core bonds were modestly positive in October, with the Bloomberg Barclays U.S. Aggregate Index returning 0.06%.
  • U.S. real estate posted negative returns October, with the Wilshire U.S. Real Estate Securities IndexSM dropping -0.88%. Global real estate securities posted positive returns, with the Wilshire Global ex U.S. Real Estate Securities IndexSM rising 0.17%.
  • Commodities continued to post positive returns in October, with the Bloomberg Commodity Index gaining 2.14%.

Alternatives

  • The Wilshire Liquid Alternatives IndexSM returned 0.77% in October. The Global Macro and Multi-Strategy indices were the best performers during the month, with the Wilshire Liquid Alternative Global Macro IndexSM advancing 2.29% and Wilshire Liquid Alternative Multi-Strategy IndexSM advancing 0.99%.
  • The Wilshire Liquid Alternative Relative Value IndexSM lagged the pack, returning 0.05%.

GICS Sector Returns*

Wilshire 5000 Index
As of 10/31/2017
MTD (%) QTD (%) YTD (%) 1 Year (%)
Consumer Discretionary 1.80 1.80 14.69 18.05
Consumer Staples -1.31 -1.31 4.55 3.03
Energy -0.74 -0.74 -8.54 -1.58
Financials 2.62 2.62 14.16 38.33
Health Care -1.02 -1.02 20.60 16.33
Industrials 0.76 0.76 15.10 24.61
Information Technology 7.41 7.41 35.86 38.00
Materials 3.62 3.62 19.92 26.74
Real Estate 0.16 0.16 6.12 3.00
Telecommunications Services -6.95 -6.95 -10.47 -5.11
Utilities 4.11 4.11 16.45 17.25

*GICS Sector returns for the Wilshire 5000 Total Market IndexSM. Source: Wilshire AtlasSM.

North American Equity

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire 5000 Total Market IndexSM 2.15 2.15 16.17 23.96
Standard & Poor’s 500 2.33 2.33 16.91 23.63
Standard & Poor’s/TSX (CAD) 2.73 2.73 7.30 11.48

U.S. Equity by Size/Style

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire U.S. Large Cap IndexSM 2.31 2.31 16.83 23.89
Wilshire U.S. Large Cap Growth IndexSM 3.09 3.09 22.66 29.54
Wilshire U.S. Large Cap Value IndexSM 1.56 1.56 11.34 18.53
Wilshire U.S. Small Cap IndexSM 0.76 0.76 10.39 24.89
Wilshire U.S. Small Cap Growth IndexSM 1.58 1.58 16.60 32.24
Wilshire U.S. Small Cap Value IndexSM -0.05 -0.05 4.26 17.71
Wilshire U.S. Micro Cap IndexSM -1.15 -1.15 11.72 29.19

International Equity (USD)

  MTD (%) QTD (%) YTD (%) 1 Year (%)
MSCI AC World ex U.S. 1.88 1.88 23.41 23.64
MSCI EAFE 1.52 1.52 21.78 23.44
MSCI Europe 0.47 0.47 23.37 27.01
MSCI Pacific 3.53 3.53 19.48 18.07
MSCI Japan 4.61 4.61 19.55 17.80
MSCI EM (Emerging Markets) 3.51 3.51 32.26 26.45

International Equity (Local Currency)

  MTD (%) QTD (%) YTD (%) 1 Year (%)
MSCI AC World ex U.S. 3.18 3.18 17.07 21.57
MSCI EAFE 2.97 2.97 14.46 21.11
MSCI Europe 2.09 2.09 13.97 19.79
MSCI Pacific 4.67 4.67 15.92 24.18
MSCI Japan 5.60 5.60 16.47 27.38
MSCI EM (Emerging Markets) 3.89 3.89 28.34 25.72

North American Fixed Income

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Bloomberg Barclays U.S. Aggregate 0.06 0.06 3.20 0.90
Bloomberg Barclays Long-Term Treasury -0.08 -0.08 5.94 -2.44
Bloomberg Barclays U.S. TIPS 0.21 0.21 1.94 -0.11
Bloomberg Barclays U.S. Credit 0.34 0.34 5.43 3.18
Bloomberg Barclays Corporate High Yield 0.42 0.42 7.45 8.92

International Fixed Income

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Bloomberg Barclays Global Aggregate (Unhedged) -0.38 -0.38 5.85 1.18
Bloomberg Barclays Global Aggregate (Hedged) 0.42 0.42 2.65 1.23
JPM EMBI Plus -0.13 -0.13 8.49 4.83

Real Estate/Commodities/Alternatives

  MTD (%) QTD (%) YTD (%) 1 Year (%)
Wilshire U.S. Real Estate Securities IndexSM  -0.88 -0.88 2.16 5.65
Wilshire Global ex U.S. Real Estate Securities IndexSM  0.17 0.17 14.00 11.90
Wilshire Global Real Estate Securities IndexSM  -0.51 -0.51 6.05 7.76
S&P GSCI Commodity (S&P GSCI)  3.82 3.82 -0.08 7.28
Bloomberg Commodity Index  2.14 2.14 -0.79 2.35
Wilshire Liquid Alternatives IndexSM  0.77 0.77 4.31 4.60
Wilshire Liquid Alternative Equity Hedge IndexSM  0.85 0.85 5.93 8.17
Wilshire Liquid Alternative Event Driven IndexSM  0.34 0.34 2.82 3.55
Wilshire Liquid Alternative Global Macro IndexSM  2.29 2.29 3.39 1.96
Wilshire Liquid Alternative Multi-strategy IndexSM  0.99 0.99 6.22 6.78
Wilshire Liquid Alternative Relative Value IndexSM 0.05 0.05 3.22 2.84
Wilshire Focused Liquid Alternative IndexSM 0.79 0.79 4.11 4.38

*Returns are as of October 31, 2017. Source: Wilshire CompassSM

The Wilshire Indexes are calculated and distributed by Wilshire Associates Incorporated (“Wilshire”). The indices do not represent an investment. It is not possible to invest directly in an index. Exposure to an asset class represented by an index may be available through investable instruments derived from that index. Wilshire makes no representations regarding the advisability of investing in investment products based on the Wilshire Indexes not sponsored, endorsed, sold or promoted by Wilshire. Index returns do not reflect payment of certain sales charges or fees an investor may pay to purchase the securities underlying the Index or investment vehicles intended to track the performance of the Index. The imposition of these fees and charges would cause actual performance of the securities/vehicles to be lower than the Index performance shown. Inclusion of a company in the Wilshire Indexes does not in any way reflect an opinion of Wilshire on the investment merits of the company. Index returns are preliminary and are subject to revision.

The information from third parties contained herein has been obtained from sources believed to be reliable. Wilshire Funds Management gives no representations or warranties as to the accuracy of such information, and accepts no responsibility or liability (including for indirect, consequential or incidental damages) for any error, omission or inaccuracy in such information and for results obtained from its use. Wilshire Funds Management (“WFM”) is a business unit of Wilshire Associates Incorporated (“Wilshire®”). WFM delivers Wilshire Advisor Solutions, which include models designed to provide a broad range of outcome-oriented investment solutions for advisors to use with their clients. 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.

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2017 Third Quarter Market Update
  • Presented by: Josh Emanuel, CIO, Wilshire Funds Management
  • Date: Wed., Oct. 18, 2017