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BNY Mellon Trust Indicator Posts 4.9% Return in Q3

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BNY Mellon reported last week that its U.S. Master Trust Universe returned a median 4.9% in the third quarter, building on the previous quarter’s strong 10.7% median return, itself a reversal of the first quarter’s 10.9% loss suffered by plans.

The U.S. Master Trust, which provides peer comparisons of performance by plan type and size, comprises 457 corporate, foundation, endowment, public, Taft-Hartley and health care plans with a total market value of some $2.1 trillion and an average plan size of more than $7 billion.

In aggregate, U.S. Master Trust Universe plans posted a one-year return of 8.1%, a three-year annualized return of 6.7% and a five-year annualized return of 8.2%, according to the third quarter report.

Endowments were the quarter’s highest performing plan type, returning a median 5.7%, down from 8.8% in the second quarter.

“Endowment performance was supported by the rebound in alternative asset performance from the second quarter as well as an asset allocation underweight of 20% in U.S. Fixed Income versus other plan types,” Frances Barney, head of global risk solutions at BNY Mellon, said in a statement.

Corporate plans underperformed other plan types in the third quarter, returning 4%, down from 11% in the second quarter. BNY Mellon said their allocation to U.S. fixed income investments — which returned a median 1.5% — was the highest of all plan types.

All plan types returned to positive performance for the year to date, according to the report: foundations, 5.3%; public plans, 5.3%; Taft-Hartley plans, 4.8%; and health care plans, 2.7%.

The report said less than 1% of plans recorded negative results during the quarter.

In terms of asset class performance, U.S. equities posted a quarterly median return of 8.1%, versus the Russell 3000 Index return of 9.2%.

Non-U.S. equities’ median return was 6.8%, compared with the FTSE Developed ex U.S. Net Index result of 5.5%.

Non-U.S. fixed income had a median return of 3.2%, versus the FTSE World Government Bond Non-US Index return of 4.6%. And real estate returned a median 0.3%, versus the NCREIF Property Index result of 0.7%.

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