Endowment Plans Beat First Dip in Plan Sponsor Returns Since 3Q 2016, according to BNY Mellon U.S. Master Trust Universe/Asset Strategy View®

Higher allocations to alternatives improved plan performance in a tough quarter for U.S. fixed income

NEW YORK, May 8, 2018 /PRNewswire/ -- The BNY Mellon U.S. Master Trust Universe returned a median -0.39% for the first quarter of this year, the first negative result in ten quarters for the fund-level tracking service.

The BNY Mellon U.S. Master Trust Universe offers peer comparisons of performance by plan type and size. It consists of 626 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 billion. In aggregate, U.S. Master Trust Universe plans reported a one-year return of +10.13%, surpassing its 3-year annualized return of +6.37% and 5-year annualized return of +7.64%.  

In a reversal from 4Q 2017, corporate and health care plans underperformed, with quarterly returns of -478bp, and -432bp respectively.

"Endowments benefited from higher allocations to alternatives and lower allocations to U.S. fixed income investments versus other plan types. These plans overweighted alternatives at a 44% allocation versus 21% for the Master Trust Universe as a whole and underweighted U.S. fixed income at 9% versus 27% for the whole," said Frances Barney, CFA, head of Global Risk Solutions at BNY Mellon.

"Non-U.S. equity was the top performing asset class with double-digit gains over the one-year period (+17.58%), followed by U.S. Equity continuing its run of positive annual returns (+13.85%), followed by Non-US Fixed Income (+8.57%)," she added.

Additional Q1 Highlights

  • Over 29% of plans posted positive results during the quarter
  • Endowments saw the highest median return (+0.36%), followed by Foundations (-0.14%)
  • U.S. equities posted a quarterly median return of -0.40%, versus the Russell 3000 Index return of-0.64%. Non-U.S. equities saw a median return of -0.40%, compared to the Russell Developed ex U.S. Large Cap Index result of -1.78%. U.S. fixed income had a median return of -1.12%, versus the Barclays Capital U.S. Aggregate Bond Index return of -1.46%. Non-U.S. fixed income had a median return of +1.29%, versus the Citigroup Non-U.S. World Government Bond Index return of +4.42%. Real estate had a median return of +2.06%, versus the NCREIF Property Index result of +1.70%

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. Trust Universe Median Plan Returns*
Period Ending March 31, 2018

Universe                                            

Number of 
Participants

1Q 
2018

One-
Year

Five-
Years

Ten-
Years

Master Trust Total Fund

626

(0.39)

10.13

7.64

6.32

    Corporate Plans

256

(1.14)

9.79

7.59

6.50

    Foundations

85

(0.12)

10.14

7.24

5.79

    Endowments

91

0.52

10.61

7.72

6.10

    Public Plans

123

(0.14)

10.64

7.97

6.49

    Taft-Hartley Plans

46

(0.19)

9.33

7.74

6.06

    Health Care Plans

19

(0.71)

9.06

6.81

6.24

*All returns are posted gross of fee results.

 

BNY Mellon U.S. Asset Allocations Medians (of those invested) by Asset Class
Period Ending March 31, 2018

Asset Class 

Q1 2018

One Year Ago

Three Years Ago

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 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'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 March 31, 2018, BNY Mellon had $33.5 trillion in assets under custody and/or administration, and $1.9 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:          

Cheryl Krauss
BNY Mellon Investment Services
cheryl.krauss@bnymellon.com 
+1 212-635-8176                                                  

Frank Pinto  
BNY Mellon Investment Services
frank.pinto@bnymellon.com 
+1 917-309-1065

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SOURCE BNY Mellon

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