February 13, 2015

Weak Fourth Quarter a Drag on 2014 Returns of U.S. Master Trust Universe, says BNY Mellon

2014's median plan return of +6.6% down from +14.3% in 2013; Only 43% of plans matched or outperformed the custom policy return in Q4


NEW YORK, Feb. 13, 2015 /PRNewswire/ -- The median return of the BNY Mellon U.S. Master Trust Universe was 1.62% for the fourth quarter of 2014, resulting in year-to-date performance for the typical fund of +6.6%, well behind the +14.3% returned in 2013. Still, the average plan posted gains in three of four quarters last year. 

With a market value of more than $2.7 trillion and an average plan size of $3.7 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 644 corporate, foundation, endowment, public, Taft-Hartley, and health care plans.

"For 2014, corporate funds outpaced other plan types with a return of +8.56%, getting a boost from their relative over-weighting of U.S. equity holdings," said John Houser, senior consultant for BNY Mellon's Global Risk Solutions group. "Following behind corporates, endowment funds returned +6.51% on average, while Taft-Hartley plans lagged all plan types at +5.62%."

Q4 Highlights

  • 93% of plans in the BNY Mellon Master Trust universe returned positive results during the quarter
  • 43% of plans matched or outperformed the custom policy return for Q4
  • Corporate plans recorded the highest median return (+2.36%), followed by Taft-Hartley plans (+1.56%). The difference between the highest performing (corporates) and lowest performing group (endowments) was a significant 1.33 percentage points
  • U.S. equities posted a quarterly median return of +5.13%, versus the Russell 3000 Index return of +5.24%. Non-U.S. equities saw a median return of -2.82%, slightly ahead the Russell Developed ex U.S. Large Cap Index result of -3.39%. U.S. fixed income had a median return of +1.35%, versus the Barclays Capital U.S. Aggregate Bond Index return of +1.79%. Non-U.S. fixed income had a median return of -1.79%, versus the Citigroup Non-U.S. World Government Bond Index return of -2.91%. Real estate had a median return of +3.25%, versus the NCREIF Property Index result of +3.04%. 

The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the fourth quarter was: U.S. equity 26%, U.S. fixed income 26%, non-U.S. equity 17%, non-U.S. fixed income 2%, real estate 4%, cash 1%, and alternatives/other 24%.

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 Dec. 31, 2014, BNY Mellon had $28.5 trillion in assets under custody and/or administration, and $1.7 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). Learn more at www.bnymellon.com, or follow us on Twitter @BNYMellon.

 

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

Period Ending December 31, 2014


                                                                     Universe                                              

Number of   Participants

4Q 
2014

One-

Year

Five- Years

Ten-Years

Master Trust Total Fund

644

1.62

6.64

9.57

6.68

    Corporate Plans

224

2.36

8.56

9.95

6.87

    Foundations

69

1.16

5.88

9.04

6.56

    Endowments

105

1.03

6.51

9.64

6.88

    Public Plans

99

1.49

6.48

9.87

6.73

    Taft-Hartley Plans

56

1.56

5.62

8.79

5.97

    Health Care Plans

20

1.43

5.82

8.62

6.13

Universe Custom Composite Benchmark


2.98

8.31

10.38

6.72


*All returns are posted gross of fee results.

 

BNY Mellon U.S. Master Trust Universe Median Allocations by Asset Class

Period Ending December 31, 2014

Asset Class

Q4

2014

Q3

2014

One
Year
Ago

Three
Years
Ago

Five
Years
Ago

U.S. equity

26%

26%

28%

29%

34%

U.S. fixed income

26%

26%

24%

29%

26%

Non-U.S. equity

17%

17%

18%

15%

17%

Non-U.S. fixed income

2%

1%

1%

2%

2%

Real estate

4%

4%

3%

2%

2%

Cash

1%

2%

1%

2%

1%

Alternatives/Other

24%

24%

25%

21%

18%

 

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 2014.  This data is provided by Barclays Bank PLC all rights are reserved. Citigroup Non-US World Government Bond Index: © Citigroup Global Markets Inc., 2014. 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.

Contact:

Joseph F. Ailinger Jr.

+1 617-722-7571

joe.ailinger@bnymellon.com

 

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SOURCE BNY Mellon