BNY Mellon U.S. Master Trust Universe Posts 2.5% Q1 Return
Endowments continue to outperform other types of plans, BNY Mellon reported.
The BNY Mellon U.S. Master Trust Universe returned a median 2.5% in the first quarter, its fourth consecutive positive quarterly performance, BNY Mellon reported this week.
The U.S. Master Trust Universe, which offers peer comparisons of performance by plan type and size, consists of 489 corporate, foundation, endowment, public, Taft-Hartley and health care plans with a total market value of some $2.4 trillion and an average plan size of over $8 billion.
In aggregate, its plans reported a one-year return of 30.2%, exceeding the three-year annualized return of 9.7% and the five-year annualized return of 10%.
For the third quarter in a row, endowments were the highest-performing plan type, benefiting from having a lower fixed-income allocation than any plan type. Corporate plans, in contrast, continued to underperform other plan types because of higher allocations to fixed-income investments.
On average, endowments allocated 11% of assets to fixed income, compared with a 48% allocation by corporate plans and a 30% allocation by the average plan in the Master Trust Universe.
Here’s the first-quarter performance breakdown by plan type:
- Corporate plans: -0.8%.
- Foundations: 3.4%.
- Endowments: 4.7%.
- Public plans: 3.4%.
- Taft-Hartley plans: 2.8%.
- Health care plans: 1.9%.
“According to BNY Mellon’s Master Trust Universe, U.S. equity was the highest performing asset class in the first quarter of 2021 while fixed income performance turned negative globally,” Frances Barney, head of global risk solutions at BNY Mellon, said in a statement.
U.S. equities posted a quarterly median return of 6.6%, versus the Russell 3000 Index return of 6.4%. Non-U.S. equities had a median return of 3.8%, compared with the FTSE Developed ex U.S. Net Index result of 4%.
U.S. fixed income had a median return of -2.8%, versus the Barclays Capital U.S. Aggregate Bond Index return of -3.4%. Non-U.S. fixed income posted a median return of -3.7%, versus the FTSE World Government Bond Non-US Index return of -6.4%.
Real estate’s median return of 2.2% compared favorably with the NCREIF Property Index result of 1.7%.