Positive start to 2010 with 6.6% returns in Q1

Strong equity performance sees median 12-month performance soar to 39.1%

LONDON, 30 April 2010 — New statistics from BNY Mellon Asset Servicing's quarterly pooled fund survey show that balanced pooled funds started 2010 with a positive return of 6.6% in the first quarter (3.1% in Q4 2009). This is the fourth consecutive quarter that we have seen a positive return, and brings the 12-month median return to 39.1%*.

According to data from BNY Mellon, whose Pooled Pension Fund Database covers the largest and most representative sample available to UK pension funds' trustees, balanced pooled funds also showed positive returns over three, five and ten-year periods to 31 March 2010, with returns of 2.7%, 7.9% and 3.5% per annum respectively.

Returns were positive for all the major sectors in Q1 2010. Within Equities, BNY Mellon recorded positive results for all sectors, with Japanese Equity posting the highest return with 15.1%. The lowest return was provided by Europe Ex UK Equity with 3.7%. However, the majority of the equity sectors failed to beat their respective indices during Q1 2010.

UK Equity pooled fund managers achieved a return of 6.5% in Q1 2010, outperforming the FTSE All Share Index, which returned 6.4% over the same period. Over twelve months UK Equity achieved 49.9% which underperformed its Index by 2.4%. For the three-year period to 31 March 2010, UK Equity posted a negative return with -0.8% per annum; this underperformed its index by 0.6% per annum. The five and ten-year periods however, show positive returns of 6.8% per annum and 2.5% per annum respectively, though again both failed to beat the index returns for the periods in question.

Global Equity retuned 8.4% for Q1 2010. This return underperformed its index which posted 9.9% for the quarter. For the twelve-month period Global Equity achieved 47.2% while the Index achieved 48.4%. The three, five and ten-year period were also positive with 2.0% per annum, 8.2% per annum and 2.5% per annum respectively. Of these three returns only the ten-year beat its index.

In the first quarter of 2010 UK Bond pooled fund managers returned 3.6% and outperformed the comparative market index of 1.1%. International Bond pooled fund managers fared better, achieving a return of 6.0%. International Bonds also outperformed their Index by 0.4%. Cash posted a return of 0.1% for Q1 2010 which matched its Index which also returned 0.1%.

Property pooled fund managers continued their run of positive quarterly returns with 4.8% during the quarter. Over twelve months the median return for this sector was also positive with a return of 13.6%.

Commenting on the performance of the pooled funds, Alan Wilcock, Performance and Risk Analytics Manager at BNY Mellon Asset Servicing, said: "Positive returns from the equity markets for the fourth quarter in a row helped produce a 12-month median return of 39.1%; the best annual result for over 20 years. UK Bond funds also performed well with a median return of 19.3%, boosted by the strong performance of corporate bonds"

Weightings slide in UK Equities after year of gains

Within BNY Mellon's balanced pooled fund universe, the weightings in UK Equities, which had steadily risen during 2009, fell 0.5% from the previous quarter to 37.7%. This can be attributed mainly to manager movements during the quarter.

Weightings in Overseas Equities rose during the quarter by 0.6%, most notably North American Equity where the company recorded an increase in holdings by 1.0%. North American Equity primarily rose due to relative performance.

Within Bonds, weightings for the UK decreased by -0.2% to 8.3% over the quarter due to a mixture of relative performance and manager movements. International Bonds decreased by 0.5% to 3.7%. Weightings in Index-Linked Gilts also fell with weightings in Property remaining static over the quarter.

"Average Total Equity weightings remained at over 80% of assets in balanced funds over the last quarter. While cash weightings have declined from nearly 10% of assets 12 months ago the average weighting remains above 5% of assets," added Wilcock.

BNY Mellon Asset Servicing's Pooled Pension Fund Database currently covers 61 separate asset managers who manage over £379 billion in pooled funds, both balanced and specialist.

The performance analysis and other information in this press release are based on historical data and are intended for informational purposes only. Past performance is not a guarantee of future performance. This press release does not constitute investment advice, nor is it an offer or recommendation of any security, investment product, service or firm.

BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of specialised asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services.

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. BNY Mellon 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. BNY Mellon 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, $1.1 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. Additional information is available at www.bnymellon.com.

* To generate a median BNY Mellon first calculates the returns for the underlying funds within the respective sector for the time period required. BNY Mellon then selects the median fund from these funds. BNY Mellon only generates a Median if there are nine of more funds available within the sector and BNY Mellon does not chain link medians to get longer term returns.
This press release is issued by The Bank of New York Mellon to members of the financial press and media. All information and figures source The Bank of New York Mellon as at 31 March 2010 unless otherwise stated. The Bank of New York Mellon, London Branch, registered in England and Wales with FC005522 and BR000818
Branch office: One Canada Square, London E14 5AL
Authorised and regulated in the UK by the Financial Services Authority.