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Wilshire 5000® $2.8 Trillion December Loss Fuels First Negative Year since the Financial Crisis

January 2, 2019

SANTA MONICA, Calif.--(BUSINESS WIRE)--Jan 2, 2019--The Wilshire 5000 Total Market Index SM, the original pure and complete measure of the U.S. stock market, fell -9.30 percent in December, -14.29 percent fourth quarter and -5.27 percent in 2018 to close the year at 25,647.29. Without dividends reinvested, the index had an estimated market value all-time record monthly loss of $2.8 trillion in December, all-time record quarterly loss of $4.7 trillion fourth quarter and loss of $2.2 trillion for the year. Combined losses resulted in the worst annual market value decline since the 2008 Financial Crisis, according to Wilshire Associates Incorporated (Wilshire®), a diversified global financial services firm.

“Volatility continued, with the Wilshire 5000 moving more than one percent on nearly half of all active trading days in December, and of those days, half again moved two percent,” said Jason Schwarz, President of Wilshire Analytics and Wilshire Funds Management. “The decision to raise interest rates was met with concern that the Fed may slow the already uncertain future of economic growth, and geopolitical risk exacerbated concerns, as political dysfunction in Washington has led to a government shutdown. Ultimately, December saw the worst percentage loss for the Wilshire 5000 in nearly a decade, surpassing October’s all-time record point and dollar losses,” he added.

Early 2018 small-cap gains were eclipsed by large-cap (represented by the Wilshire US Small-Cap Index SM and Wilshire US Large-Cap Index SM ), which outperformed for the fourth consecutive month, quarter and year with losses of -9.04, -13.69 and -4.64 percent, respectively; meanwhile, small-cap fell -11.82, -19.67 and -10.84 percent for the month, quarter and year, respectively.

Early 2018 gains in growth cemented its top 2018 performance, in spite of a lag to value for four straight months and fourth quarter. Large-cap value (represented by the Wilshire US Large-Cap Value Index SM ) returned -9.01, -10.75 and -5.94 percent for the month, quarter and year, respectively; and, large-cap growth (represented by the Wilshire US Large-Cap Growth Index SM ) fell further at -9.07, -16.82, and slightly less at -3.58 percent for the same, respectively. While large-cap value secured best style performance for the month and last quarter, large-cap growth nabbed best style performance for the year.

Small-cap growth (represented by the Wilshire US Small-Cap Growth Index SM ) shed -12.00, -20.59, and -9.71 percent for the month, quarter and year, respectively; meanwhile, small-cap value (represented by the Wilshire US Small-Cap Value Index SM ) posted losses of -11.66, -18.73, and -12.04 percent for the month, quarter and year, respectively.

Sectors

All Wilshire 5000 sectors were negative for the first time in over five years. Utilities took best sector performance in December, losing -4.03 percent. Combined with a second best performance in October, Utilities cemented best sector performance for the quarter with a gain of 0.79 percent. Annual 4.40 percent gains landed Utilities just behind Health Care, the year’s best sector with an .annual gain of 5.60 percent. Real Estate, a top three performing sector for the past three months, fell to third place for both the month and quarter with losses of -7.87 and -6.22 percent, respectively. Consumer Staples, just ahead with losses of -5.54 percent, held second best performance for the quarter.

Energy suffered from falling oil prices for the third month in a row, fueling a worst sector performance in December with losses of -13.34 and net losses for the quarter of -25.62. This, in addition to two previous months this year as worst performing sector, combined to cement Energy as worst performing sector in 2018, falling -19.47 percent. Financials came in second worst for the month, falling -11.35 percent. Industrials, a bottom three performer every other month for the past nine months, ended fourth quarter as second worst for the quarter, falling -18.24 percent. Materials was second worst for the year, falling -16.63 percent.

BDC

Business development companies (represented by the Wilshire Business Development Company Index SM ) performed worse than they had in over eight years, falling -8.81 percent in December. These losses drove quarterly losses down to -11.62 percent, and annual returns to -2.31 percent.

Real Estate

U.S. real estate (represented by The Wilshire US Real Estate Securities Index SM and Wilshire US Real Estate Investment Trust Index SM ) fell -8.35 and -8.37 percent, respectively, in December. The month’s losses pulled quarterly and annual gains into negative territory, with quarterly losses of -6.98 and -6.93 percent, respectively, and annual losses of -4.80 and -4.84 percent, respectively, to hand U.S. real estate its first negative year since the 2008 Financial Crisis. Meanwhile, International public real estate (represented by the Wilshire exUS Real Estate Securities Index SM ) fell less than U.S. real estate, with a -1.83 percent December loss that helped it outperformed for the quarter, but not the year, at -4.44 and -6.60 percent, respectively.

Fixed Income

Bonds (represented by the Wilshire Bond Index SM ) closed December up 1.69 percent and boosted quarterly gains to 0.86 percent; however, bonds remained negative for 2018, falling -0.76 percent. Longer duration bonds delivered strong performance in December, evidenced by gains for the Nuveen Wilshire Intermediate (5-10) Corporate Bond Index, Nuveen Wilshire Long (10-20) Corporate Bond Index, Nuveen Wilshire Long (20-30) Corporate Bond Index and Nuveen Wilshire Ultra Long (20+) STRIPS Index at 1.71, 2.41, 3.43 and 8.00 percent, respectively.

All values as of December 31 st, 2018. Index values are in price values. All returns are total returns and reflect float-adjusted market capitalization. Returns are annualized for periods greater than one year.

About Wilshire Associates Wilshire Associates, a leading global financial services firm, provides consulting services, analytics solutions and customized investment solutions 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, providing revolutionary technology and acting as an early innovator in the application of investment analytics and research to investment managers in 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 Index and became an early innovator in creating integrated asset/liability analysis/simulation models as well as practical models in risk budgeting through beta and active risk analysis. Wilshire has grown to a firm of approximately 275 employees serving the needs of investors around the world. Based in Santa Monica, California, Wilshire provides services to clients in more than 20 countries representing more than 500 organizations with assets totaling approximately US $9 trillion.* With ten offices worldwide, Wilshire Associates and its affiliates are dedicated to providing clients with the highest quality products and services. Wilshire® and Wilshire 5000® are registered service marks of Wilshire Associates Incorporated. Wilshire 5000 Total Market Index℠ is a service mark of Wilshire Associates Incorporated.

Please visit www.wilshire.com Twitter: @WilshireAssoc

*Client assets are as represented by Pensions & Investments (P&I), detailed in P&I’s “Largest Retirement Funds” and P&I’s “Largest Money Managers (U.S. institutional tax-exempt assets)” as of 9/30/17 and 12/31/17, and published 2/5/18 and 5/28/18, respectively. The data in this release are copyrighted and owned by Wilshire Associates Incorporated.

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View source version on businesswire.com:https://www.businesswire.com/news/home/20190102005174/en/

CONTACT: Wilshire Associates

Lisa Herbert

+1-310-899-5325 (O)

+1-310-728-5341 (C)

lherbert@wilshire.com

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE

SOURCE: Wilshire Associates,

Copyright Business Wire 2019.

PUB: 01/02/2019 09:01 AM/DISC: 01/02/2019 09:01 AM

http://www.businesswire.com/news/home/20190102005174/en

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