BNY Mellon Trust Indicator Posts 4.9% Return in Q3
Robust equity markets drive positive performance for all plan types in the U.S. Master Trust Universe during the quarter.
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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