August 10, 2012

Global Uncertainty Drives Down Q2 2012 Returns for U.S. Master Trust Universe, says BNY Mellon


First negative returns since Q3 2011; median plan still up 5.65% year-to-date

BOSTON, August 10, 2012 — The median return of the BNY Mellon U.S. Master Trust Universe was -1.47% for the second quarter of 2012, driving down performance for the typical fund to 5.65% on a year-to-date basis.  This marks only the third time in the last 12 quarters that the median plan has shown a negative return, and the first time since third quarter of 2011.  Even with weak quarterly performance, the median plan remained up 1.26% for the twelve months ending June 30, 2012.

With a market value of more than $2.1 trillion and an average plan size of $3.1 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 more than 700 corporate, foundation, endowment, public, Taft-Hartley and health care plans.

"All segments of the BNY Mellon Master Trust Universe were in the red for the second quarter as distress in the Euro zone largely plagued results for the period," said John Houser, vice president and manager of performance & risk analytics for BNY Mellon.  "Global equity markets tumbled in April and May, and U.S. markets fared only slightly better as the upcoming 'fiscal cliff' weighed heavily.  Fixed income posted solid results, but the near-term outlook for bonds remains cloudy.  Real estate continued its momentum with a 2.45% return, marking 10 straight quarters of positive performance for that asset class."

Highlights

  • Only 20% of plans had positive results for the quarter ending June 30, 2012.  For the 12-month period, 67% of plans were in the black.
  • 48% of plans matched or outperformed the custom policy return of -1.41% for Q2.  For the full year, 25% of plans outperformed the custom policy.
  • Corporate plans were the leading plan type for the second quarter with a median return of -0.85%, followed by health care plans, endowments, public plans, Taft-Hartley, and foundations.
  • Real estate was the dominant asset class for the quarter with a median return of 2.45%, versus the NCREIF Property Index result of 2.68%.  U.S. fixed income had a median return of 2.32%, versus the Barclays Capital U.S. Aggregate Bond Index return of 2.06%.  Non-U.S. fixed income posted a median return of 0.65%, compared to the Citigroup Non-U.S. World Government Bond Index return of 0.20%.  U.S. equities posted a median three month return of -3.64%, versus the Russell 3000 Index return of -3.15%.  Non-U.S. equities posted a median return of -7.07%, just ahead of the Russell Developed ex US Large Cap Index result of -7.09%.

The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the second quarter was: U.S. fixed income 29%, U.S. equity 28%, non-U.S. equity 16%, non-U.S. fixed income 2%, real estate 2%, cash 1%, and alternatives/other 22%.

BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of specialized asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services. BNY Mellon Asset Servicing provides services through BNY Mellon and other related companies.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $27.1 trillion in assets under custody and administration and $1.3 trillion in assets under management, services $11.5 trillion in outstanding debt, and processes global payments averaging $1.4 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Learn more at www.bnymellon.com or follow us on Twitter@BNYMellon.

 

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

Period Ending June 30, 2012


 Universe                                                        

Number of
Participants

2Q
2012

One-
Year

Five-
Years

Ten-
Years

Master Trust Total Fund

702

-1.47

1.26

1.92

6.56

    Corporate Plans

240

-0.85

3.82

2.40

6.87

    Foundations

77

-1.80

0.05

1.41

6.58

    Endowments

89

-1.53

0.58

1.89

6.74

    Public Plans

112

-1.60

1.14

1.89

6.33

    Taft-Hartley Plans

85

-1.65

1.94

1.64

5.61

    Health Care Plans

13

-1.42

1.29

--

---

Universe Custom Composite Benchmark

-1.41

3.79

2.88

6.21

 

BNY Mellon U.S. Master Trust Universe Median Allocations by Asset Class
Period Ending June 30, 2012

 

Asset Class

 

Q2

2012

 

Q1

2012

One
Year
Ago

Three
Years
Ago

Five
Years
Ago

U.S. equity

28%

29%

32%

33%

38%

U.S. fixed income

29%

27%

26%

30%

22%

Non-U.S. equity

16%

16%

18%

15%

21%

Non-U.S. fixed income

2%

2%

2%

1%

1%

Real estate

2%

2%

2%

2%

2%

Cash

1%

2%

2%

2%

1%

Alternatives/Other

22%

22%

18%

17%

15%

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 2012.  This data is provided by Barclays Bank PLC all rights are reserved.

Citigroup Non-US World Government Bond Index: © Citigroup Global Markets Inc., 2012. All rights reserved.