Second Quarter Plan Sponsor Returns Stay Positive with Non-US Equity Leading the Way, according to BNY Mellon U.S. Master Trust Universe/Asset Strategy View

New York - 16 August 2017

Seventh straight quarter in the black; One-year gain of 12.21% tops three and five-year annualized returns 

The BNY Mellon U.S. Master Trust Universe returned a median +3.19% for the second quarter, marking the seventh straight quarter of positive results for the fund-level tracking service.

Frances Barney, CFA, head of Global Risk Solutions at BNY Mellon

While performance was strong across all plan types, Corporate Plans reported the highest median return, climbing +3.72% for the BNY Mellon U.S. Master Trust Universe, which has a market value of more than $2.1 trillion and an average plan size of $5.6 billion. The BNY Mellon Master Trust Universe reported a one-year return of +12.21%, which surpassed its 3-year annualized return of +5.25% and 5-year annualized return of +8.48%.

"Corporate Pensions benefited from strong performance of their US Fixed Income investments versus other plan types, rising +3.24% versus +1.62% for the Master Trust Universe as a whole," said Frances Barney, CFA, head of Global Risk Solutions at BNY Mellon.

"Taft-Hartley plan performance lagged other plan types due to lower allocations to Non-US Equity, while all asset classes continued to post positive results on a one-year basis in the second quarter," she added.

The BNY Mellon U.S. Master Trust Universe, which consists of 618 corporate, foundation, endowment, public, Taft-Hartley, and health care plans, offers peer comparisons of performance by plan type and size.

"According to Asset Strategy View, Non-U.S. equity was the top performing asset class with double-digit gains over the one-year period (+20.59%), followed by US Equity continuing its run of strong performance (+18.73%) followed by Real Estate (+8.24%%)." she added.

Launched last spring, Asset Strategy View delivers aggregate levels of asset owner allocations and capital flows to provide insight into market trends and investor activity. The solution is available to users of the BNY Mellon U.S. Master Trust Universe and as a separate big data service.

Q2 Highlights

  • Over 99% of plans posted positive results during the quarter
  • Corporate Plans saw the highest median return (+3.72%), followed by Publics (+3.17%)
  • U.S. equities posted a quarterly median return of +3.09%, versus the Russell 3000 Index return of +3.02%. Non-U.S. equities saw a median return of +6.17%, compared to the Russell Developed ex U.S. Large Cap Index result of +6.01%. U.S. fixed income had a median return of 1.62%, versus the Barclays Capital U.S. Aggregate Bond Index return of +1.45%. Non-U.S. fixed income had a median return of +3.47%, versus the Citigroup Non-U.S. World Government Bond Index return of +3.81%. Real estate had a median return of +1.98%, versus the NCREIF Property Index result of +1.75%

The average asset allocation in the BNY Mellon U.S. Trust Universe for the second quarter was: US Equity 20%, Non-US Equity 16%, Global Equity 5%, US Fixed Income 20%, Global Fixed Income 1%, Non-US Fixed Income 1%, Other Fixed Income 2%, TIPS/Inflation Linked Bonds   2%, Real Estate 7%, Private Equity 10%, Other Real Assets 2%, Hedge Funds 9%, Cash 3%, and Other 1%.

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.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of Sept. 30, 2016, BNY Mellon had $30.5 trillion in assets under custody and/or administration, and $1.72 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). 

BNY Mellon U.S.  Trust Universe Median Plan Returns*

Period Ending June 30, 2017

 

Universe

Number of
Participants

2Q
2017

One-

Year

Five-
Years

Ten-
Years

Master Trust Total Fund

618

3.19

12.21

8.48

5.30

    Corporate Plans

233

3.72

11.06

8.45

5.55

    Foundations

85

3.02

12.59

8.16

4.83

    Endowments

93

2.91

12.89

8.51

5.12

    Public Plans

124

3.17

12.51

8.89

5.36

    Taft-Hartley Plans

51

2.75

12.73

8.64

5.11

    Health Care Plans

18

2.76

10.45

7.17

4.28

     

*All returns are posted gross of fee results.

 

BNY Mellon U.S.  Trust Universe Median Allocations by Asset Class
Period Ending June 30, 2017

 

Asset Class

  

One
Year
Ago

Two
Years
Ago

Three
Years
Ago

 

Q2 2017

Q1 2017

   

US Equity

20%

20%

19%

19%

20%

Non-US Equity

16%

16%

16%

16%

16%

Global Equity

5%

5%

5%

5%

6%

US Fixed Income

20%

20%

21%

22%

21%

Global Fixed Income

1%

1%

1%

1%

2%

Non-US Fixed Income

1%

1%

1%

1%

1%

Other Fixed Income

2%

2%

2%

2%

2%

TIPS/Inflation Linked Bonds

2%

2%

2%

2%

2%

Real Estate

7%

7%

8%

7%

7%

Private Equity

10%

10%

11%

10%

10%

Other Real Assets

2%

2%

2%

2%

2%

Hedge Funds

9%

9%

9%

10%

9%

Other

1%

1%

0%

0%

0%

Cash

3%

3%

3%

3%

2%

 

100%

100%

100%

100%

100%

Russell 3000 Index and Russell Developed ex US Large Cap Index:  Russell Investment Group ("Russell") is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto.  The Russell Index data may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. Barclays Capital U.S. Aggregate Bond Index: © Barclays Bank PLC 2016.  This data is provided by Barclays Bank PLC all rights are reserved. Citigroup Non-US World Government Bond Index: © Citigroup Global Markets Inc., 2016. All rights reserved.

Information containing any historical information, data or analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Past performance does not guarantee future results. The Information should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), any security, financial product or other investment vehicle or any trading strategy.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of June 30, 2017, BNY Mellon had $31.1 trillion in assets under custody and/or administration, and $1.8 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).           

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