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U.S. Master Trust Universe Reflects Negative Returns in Q3, says BNY Mellon

Real estate the lone bright spot, extending a five-year streak of quarterly gains

The median return of the BNY Mellon U.S. Master Trust Universe, a fund-level tracking service, was -4.67% for the third quarter, the second straight quarter of negative performance. The one-year return of -0.68% was below the five-year annualized return of +1.87% and is the lowest median annual return reported since 3Q-2011. 

With a market value of more than $2.1 trillion and an average plan size of $3.6 billion, the BNY Mellon U.S. Master Trust Universe is a fund-level tracking service that can be used to make peer comparisons of both performance and asset allocation results. The Universe consists of 595 corporate, foundation, endowment, public, Taft-Hartley, and health care plans.

"All plan types were in the red for the third quarter and the twelve-month period," said John Houser, senior consultant for BNY Mellon's Global Risk Solutions group. "Looking at asset classes, real estate (+3.14%) and U.S. fixed income (+0.52%) were the only positive segments for the quarter. Over the last year, real estate is the only asset class with double-digit gains (+13.6%), continuing its run of more than five years of positive quarters. Not surprisingly, median plan allocations to real estate ticked up from 4% last quarter to 5% in Q3."

Q3 Highlights

  • Only 3.4% of plans posted positive results during the quarter;
  • Corporate pensions saw the highest median return (-4.03%), followed by Health Care plans (-4.22%);
  • U.S. equities posted a quarterly median return of -7.44%, versus the Russell 3000 Index return of -7.25%. Non-U.S. equities saw a median return of -11.47%, compared the Russell Developed ex U.S. Large Cap Index result of -10.18%. U.S. fixed income had a median return of +0.52%, versus the Barclays Capital U.S. Aggregate Bond Index return of +1.23%. Non-U.S. fixed income had a median return of -3.57%, versus the Citigroup Non-U.S. World Government Bond Index return of +1.71%. Real estate had a median return of +3.14%, versus the NCREIF Property Index result of +3.09%. 

The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the third quarter was: U.S. equity 25%, U.S. fixed income 26%, non-U.S. equity 16%, non-U.S. fixed income 2%, real estate 5%, cash 1%, and alternatives/other 25%.

BNY Mellon's Asset Servicing business supports institutional investors in today's fast-evolving markets, safeguarding assets and enhancing the management and administration of client investments through services that process, monitor and measure data from around the world. We leverage our global footprint and local expertise to deliver insight and solutions across every stage of the investment lifecycle.