Close Close
ThinkAdvisor

Financial Planning > Trusts and Estates

BNY Mellon U.S. Master Trust Universe Returns 9.4% in Q4

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • The fourth quarter was BNY Mellon U.S. Master Trust Universe's third consecutive quarter of robust performance.
  • Endowment plans had the highest allocation to alternative assets of any plan type.
  • Non-U.S. equity was the top-performing asset class in the fourth quarter.

The BNY Mellon U.S. Master Trust Universe returned a median 9.4% in the fourth quarter, its third consecutive quarter of robust performance.

The BNY Mellon U.S. Master Trust Universe, made up of 483 corporate, foundation, endowment, public, Taft–Hartley and health care plans, offers peer comparisons of performance by plan type and size. It has a total market value of some $2.4 trillion and an average plan size of more than $8 billion. 

In aggregate, U.S. Master Trust Universe plans reported a one-year return of 13.2%, exceeding the three-year annualized return of 8.7% and the five-year annualized return of 9.7%. 

With a return of 10.4% in the fourth quarter, endowment plans reported the best performance for the second quarter in a row.

“Endowment performance was again supported by high allocations to alternative investments and underweighting of fixed income investments,” Frances Barney, BNY Mellon’s head of global risk solutions, said in a statement. 

Endowment plans had the highest allocation to alternative assets of any plan type, according to BNY Mellon. The average plan in the Master Trust Universe allocated 23% of its assets to alternatives and 29% to U.S. fixed income. 

Corporate plans continued to underperform other plan types, with a return of 8.1%, because of higher allocations to fixed-income investments and lower ones to alternative investments. Average corporate plan allocated 46% of their assets to U.S. fixed income and 13% to alternatives.

Here’s how other plans in the Master Trust Universe performed in the fourth quarter:

  • Public plans: 10%.
  • Foundations: 9.7%.
  • Taft–Hartley: 9.2%.
  • Health care: 7.5%.

Non-U.S. Equity Outperforms

According to BNY Mellon’s Master Trust Universe, “non-U.S. equity was the highest-performing asset class in the fourth quarter of 2020, while fixed income performance continued to lag,” Barney said.

Non-U.S. equities posted a median return of 17.04%, compared with the FTSE Developed ex U.S. Net Index result of 16.96%. U.S. equities returned a quarterly median of 15.09%, versus the Russell 3000 Index return of 14.68%. 

U.S. fixed income had a median return of 1.64%, versus the Barclays Capital U.S. Aggregate Bond Index return of 0.67%. Non-U.S. fixed income’s median return was 8.32%, compared with the FTSE World Government Bond Non-US Index return of 4.82%. 

Real estate had a median return of 1.9%, versus the NCREIF Property Index result of 1.15%. 

BNY Mellon said in its statement that Master Trust Universe users can now take advantage of the firm’s Asset Strategy View as a separate service for further analysis.

Pictured: BNY Mellon building in New York. (Photo: AP)