By Hilary Russ

Nov 9 (Reuters) - North American pension funds, foundations and other institutional trusts had their worst three months in four years in the third quarter, with a median return of -4.53 percent, according to a Wilshire Trust Universe Comparison Service (TUCS) report to be released on Monday.

"These plans, virtually all of them ... were hurt by diversification" in the global equity space, because typically they add diversity by going to international or smaller U.S. equities, said Robert Waid, managing director at Wilshire Associates.

Both of those equity classes fell dramatically, he said, noting that the MSCI ACWI World ex USA Index shed 12.17 percent, while the Wilshire US Small-Cap Index fell 10.88 percent.

The period also marked the first back-to-back declining quarters since March 31, 2009, when markets were still reeling from 15 months of recession.

"When you're starting to have comparisons that go back to the financial crisis ... it shows that it's a difficult investment environment," Waid said.

Most plan median returns also underperformed the classic 60/40 ratio, typically 60 percent stocks and 40 percent bonds. The return for such a portfolio was -3.65 percent for the third quarter, Waid said.

Wilshire TUCS, a widely-used benchmark for institutional asset performance, includes performance and asset allocation data from roughly 1,700 plans representing about $3.7 trillion in assets. The plans include public and corporate pensions, foundations and endowments and other types of trusts.

(Reporting by Hilary Russ in New York; Editing by Alan Crosby)