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Endowments Maintain Streak of Top Performance as Corporate Plan Returns Continue to Lag, according to BNY Mellon U.S. Master Trust Universe/Asset Strategy View®

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Endowments Maintain Streak of Top Performance as Corporate Plan Returns Continue to Lag, according to BNY Mellon U.S. Master Trust Universe/Asset Strategy View®

Higher allocations to alternatives drove outperformance as negative U.S. fixed income performance persisted

PR Newswire

NEW YORK, Aug. 16, 2018 /PRNewswire/ -- The BNY Mellon U.S. Master Trust Universe returned a median 0.63% in the second quarter of 2018, rebounding to positive performance after posting a negative first quarter result.

The BNY Mellon U.S. Master Trust Universe offers peer comparisons of performance by plan type and size. It consists of 490 corporate, foundation, endowment, public, Taft-Hartley, and health care plans with a total a market value of more than $2.1 trillion and an average plan size of over $6.7 billion. In aggregate, U.S. Master Trust Universe plans reported a one-year return of +7.66%, surpassing its 3-year annualized return of +6.70% while underperforming its 5-year annualized return of +7.77%.  

Continuing the trend from the first quarter, corporate and health care plans underperformed, with quarterly returns of 18bp, and 41bp respectively.

"Endowments continued to benefit from higher allocations to alternatives and lower allocations to U.S. fixed income investments versus other plan types. They overweighted alternatives at a 44% allocation versus 22% for the Master Trust Universe as a whole, and underweighted U.S. fixed income at 10% versus 28% for the whole," said Frances Barney, CFA, head of Asset Owner Product Management and Global Risk Solutions at BNY Mellon.

"U.S. Equity was the top performing asset class with double-digit gains over the one-year period (+14.39%), followed by Real Estate continuing its run of positive annual returns (+8.71%) followed closely by Non-US Equity (+8.21%)," she added.

Additional Q2 Highlights

  • Over 76% of plans posted positive results during the quarter
  • Endowments saw the highest median return (+1.22%), followed by Publics (0.99%)
  • U.S. equities posted a quarterly median return of 3.59%, versus the Russell 3000 Index return of +3.89%. Non-U.S. equities saw a median return of -2.30%, compared to the Russell Developed ex U.S. Large Cap Index result of -0.46%. U.S. fixed income had a median return of -0.12%, versus the Barclays Capital U.S. Aggregate Bond Index return of -0.16%. Non-U.S. fixed income had a median return of -5.52%, versus the FTSE World Government Bond Non-US Index return of -5.11%. Real estate had a median return of +2.21%, versus the NCREIF Property Index result of +1.81%

BNY Mellon U.S. Master Trust Universe users are now able to take advantage of Asset Strategy View as a separate service for additional analysis. Asset Strategy View layers big data analytics onto detailed asset allocation, performance, and cash flow data for the majority of the BNY Mellon U.S. Master Trust Universe. It provides additional insight into underlying market trends and investor activity.

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

Period Ending June 30, 2018


Universe                                 

Number of

Participants

2Q

2018

One-

Year

Five-

Years

Ten-

Years

Master Trust Total Fund

491

0.63

7.66

7.77

6.40

    Corporate Plans

213

0.18

6.02

7.78

6.51

    Foundations

71

0.95

7.76

7.46

5.95

    Endowments

70

1.22

8.93

7.81

6.12

    Public Plans

90

0.99

8.57

8.20

6.70

    Taft-Hartley Plans

24

0.80

7.65

7.48

6.03

    Health Care Plans

18

0.41

6.81

6.91

6.40






*All returns are posted gross of fee results.

BNY Mellon U.S. Asset Allocation Medians (of those invested) by Asset Class
Period Ending June 30, 2018

Asset Class


 

One Year Ago

 

 

Three Years Ago

 


Q2 2018



US Equity

23%

23%

23%

Non-US Equity

16%

17%

15%

Global Equity

5%

5%

5%

US Fixed Income

20%

20%

21%

Global Fixed Income

3%

3%

3%

Non-US Fixed Income

2%

2%

2%

TIPS/Inflation Linked Bonds

3%

3%

3%

Real Estate

5%

5%

5%

Private Equity

8%

8%

8%

Other Real Assets

3%

3%

3%

Hedge Funds

12%

14%

15%

Cash

2%

2%

2%

 

Russell 3000 IndexRussell Developed ex US Large Cap Index:  Frank Russell Company ("Russell") is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and / or Russell ratings or underlying data and no party may rely on any Russell Indexes and / or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell's express written consent. Russell does not promote, sponsor or endorse the content of this communication." Barclays Capital U.S. Aggregate Bond Index: © Barclays Bank PLC 2016.  This data is provided by Barclays Bank PLC all rights are reserved. FTSENon-US World Government Bond Index: London Stock Exchange Group plc and its group undertakings (collectively, the "LSE Group"). © LSE Group 2018. FTSE Russell is a trading name of certain of the LSE Group companies. "FTSE®" All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication."

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'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.

ABOUT BNY MELLON

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. As of June 30, 2018, BNY Mellon had $33.6 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). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

Contact:
Paul Patella
BNY Mellon Asset Servicing
Paul.Patella@bnymellon.com
+1 212-635-1378

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SOURCE BNY Mellon

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