PRNewswire-FirstCall
BOSTON
(NYSE:BK)
Nov 10, 2008
99% of plans post negative results for the third quarter
BOSTON, November 10, 2008 — The median plan for the 509 corporate, foundation, endowment, public, Taft-Hartley and healthcare plans that make up the BNY Mellon Master Trust Universe posted a combined -8.89% return for the third quarter of 2008, representing the fourth consecutive quarter of negative returns. Of the plans in the universe, only 39% posted a return that either matched or exceeded the custom policy return of -8.27%, a contrast to recent quarters when the majority of plans beat the universe policy.
The BNY Mellon US Master Trust Universe represents a market value of $1.2 trillion, with an average plan size of $2.4 billion.
"The US Master Trust Universe has not escaped the turmoil in the financial markets as all plan types posted negative returns for the third quarter," said Greg Stewart, first vice president and regional product manager of BNY Mellon Asset Servicing. "Healthcare plans were the best performers, posting a return of -7.50% while Endowments, who have typically been one of the better performing segments, posted the worst return of the quarter, down more than 9%."
Highlights -- Of the plans in the universe, 99% posted negative results for the period ending September 30, 2008. -- On a year-to-date basis through September 30, 2008, the BNY Mellon US Master Trust Universe is down more than 14%; on a one-year annualized basis the average return is -14.63%. -- Healthcare was the top performing plan type for the third quarter with a -7.50% median return, followed by Taft-Hartley, corporate, foundations, public and endowments. -- US fixed income led all asset classes for the quarter with a median return of -2.77%, underperforming the Lehman Brothers® Aggregate return of -0.49%. Non-US fixed income posted a median return of -5.42%, versus the Citigroup® Non-US Dollar World Government Bond Index return of -4.72%. US equities returned -9.46%, compared to the Russell 3000® Index return of -8.73%. Non-US equities returned -20.35%, lagging the MSCI® All Country World Index ex US return of -14.91%.
"Equities were hardest hit during the third quarter with the median Non-US equity return down more than 20% and just under 29% for the year. US equities faired a little better, but were still down over 9% for the quarter and 18.8% year to date," said Stewart. "The fixed income markets were more favorable but investors still have seen values fall and negative returns this year. Given the relative performance of fixed income versus equities, asset owners with greater fixed income weightings, such as Healthcare plans, have performed better, but no one has done well in absolute terms."
The average asset allocation in the BNY Mellon US Master Trust Universe for the third quarter was: US equity 32%, US fixed income 27%, non-US equity 16%, non-US fixed income 1%, alternative investments 11%, real estate 4%, cash 2%, and other (private equity, oil, gas, etc.) 7%.
BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of specialized asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services. BNY Mellon Asset Servicing offers its products and services through The Bank of New York Mellon and other subsidiaries of The Bank of New York Mellon Corporation.
The Bank of New York Mellon Corporation (NYSE: BK) is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $22.4 trillion in assets under custody and administration, approximately $1.1 trillion in assets under management and services approximately $12 trillion in outstanding debt. Additional information is available at bnymellon.com.
BNY Mellon US Trust Universe Median Plan Returns Period Ending September 30, 2008 Number of 3Q One- Five- Ten- Universe Participants 2008 Year Years Years Master Trust Total Fund 509 -8.89 -14.63 6.66 6.10 Corporate Plans 222 -8.98 -15.25 6.68 6.04 Foundations 73 -9.14 -14.59 6.97 7.01 Endowments 70 -9.37 -12.60 8.54 6.66 Public Plans 66 -9.17 -14.99 6.63 6.33 Taft-Hartley Plans 43 -7.82 -14.03 4.96 5.36 Healthcare Plans 16 -7.50 -10.22 5.87 5.24 Universe Custom Composite Benchmark -8.27 -17.93 5.64 4.26
*Russell Investment Group is the owner of the trademarks, service marks, and copyrights related to its indexes.