Second Quarter Shows Strong Gains for Plans in U.S. Master Trust Universe, According to BNY Mellon Asset Servicing

Aug 10, 2009

Rebounding equity markets lead return to positive territory; U.S. and non-U.S. markets up more than 10% and 25%, respectively

BOSTON, August 10, 2009 — The median plan in the BNY Mellon U.S. Master Trust Universe posted a 10.8% return for the second quarter of 2009, representing the first positive returns since the fall of 2007.

With a market value of $1.44 trillion and an average plan size of $2.4 billion, the BNY Mellon U.S. Master Trust Universe is a fund-level tracking service that can be used to make peer comparisons of both performance and asset allocation results. The Universe consists of 611 corporate, foundation, endowment, public, Taft-Hartley and health care plans.

"All segments of the U.S. Master Trust Universe posted a positive return for the quarter, with corporate plans leading the charge with a result of 11.69%," said Greg Stewart, managing director and regional product manager of BNY Mellon Asset Servicing. "Strong performance in the second quarter has more than offset the weak start to 2009 with all segments posting year-to-date returns in the three to five percent range."

Highlights

Of the plans in the universe, 99% posted positive results for the three month period ending June 30, 2009.
41% of the plans outperformed the custom policy return of 11.49% in the second quarter. This is a significant reduction compared to the percentage of outperforming plans reported last quarter.
Corporate pensions were the top performing plan type for the second quarter with an 11.69% median return, followed by foundations, public, Taft-Hartley, endowments, and health care plans.
Non-U.S. equities led all asset classes for the quarter with a median return of 25.26%, outperforming the MSCI All Country World ex US Index return of 19.00%. U.S. equities returned 16.90%, compared to the Russell 3000 Index return of 16.82%. Non-U.S. fixed income posted a median return of 9.36%, ahead of the Citigroup Non-US Dollar World Government Bond Index return of 5.44%. U.S. fixed income posted a result of 4.65%, versus the Barclays Capital U.S. Aggregate Bond Index return of 1.78%.

"The rebound within the U.S. and non-U.S. equity markets was a catalyst for the positive returns that asset owners experienced this quarter. Signs of a resurgent equities market were first seen in March and have continued over the past three months with the median asset class return for non-U.S. equity up more than 25% and U.S. equity up nearly 17%. Fixed income markets also posted positive returns for the quarter. Buoyant markets helped many asset owners, especially those with larger equity allocations, such as corporate and public funds," said Stewart.

The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the second quarter was: U.S. equity 33%, U.S. fixed income 30%, non-U.S. equity 15%, non-U.S. fixed income 1%, alternative investments 9%, real estate 2%, cash 2%, and other (oil, gas, etc.) 8%.

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 provides services through The Bank of New York Mellon and other related companies.

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 $20.7 trillion in assets under custody and administration, $926 billion in assets under management, services more than $11.8 trillion in outstanding debt, and processes global payments averaging $1.8 trillion per day. Additional information is available at bnymellon.com.

    BNY Mellon U.S. Master Trust Universe Median Plan Returns

    Period Ending June 30, 2009

                               Number of     2Q      One-    Five-   Ten-
    Universe                 Participants   2009     Year    Years   Years
    Master Trust Total Fund      611       10.80   -17.49     2.35    3.30
        Corporate Plans          241       11.69   -17.34     2.31    3.13
        Foundations               87       11.32   -19.14     2.36    3.58
        Endowments                83        9.63   -19.34     3.08    3.37
        Public Plans              90       10.85   -17.83     2.38    3.41
        Taft-Hartley Plans        56       10.54   -16.61     1.10    2.84
        Health Care Plans         18        8.08   -10.69     2.95    3.41
    Universe Custom Composite
     Benchmark                             11.49   -18.02     0.49    0.65

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