Feb 14, 2012
Equity allocations help drive performance in Q4, but LDI strategies contribute to full year up-tick
BOSTON, February 14, 2012 — The median return of the BNY Mellon U.S. Master Trust Universe rebounded in the fourth quarter of 2011 with a gain of 5.17%, pushed by higher returning equities. The relatively strong quarter performance moved the median plan into positive territory for the full year, up 92 basis points for the 12-months ending December 31, 2011.
With a market value of $2.15 trillion and an average plan size of $2.9 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 749 corporate, foundation, endowment, public, Taft-Hartley and health care plans.
"Closing 2011 on a high, all segments of the Universe showed positive results for the fourth quarter, with Taft-Hartley plans posting the best median return, up 5.63%," said Greg Stewart, managing director and regional product manager for BNY Mellon. "Looking at the full year, corporate pensions were the best performer with a return of 2.42%. Corporate pensions increasingly have been following liability driven investment (LDI) strategies, which carry a greater allocation to fixed income. As of December 31, corporate pensions' median allocation to U.S. fixed income was 39%, compared to public funds with 28%."
Highlights
"In contrast to the third quarter, equities helped drive returns in Q4, especially U.S. equities. All returns were positive for the period, helping asset owners across the board," said Stewart. "However, over the full year fixed income significantly outperformed equities, benefiting those plan types and asset owners who implement LDI strategies."
The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the fourth quarter was: U.S. equity 29%, U.S. fixed income 29%, non-U.S. equity 15%, non-U.S. fixed income 2%, real estate 2%, cash 2%, and alternatives/other 21%.
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 is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.8 trillion in assets under custody and administration and $1.26 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Learn more on www.bnymellon.com or follow us on Twitter @BNYMellon.
BNY Mellon U.S. Master Trust Universe Median Plan Returns
Period Ending December 31, 2011 |
|
||||
Universe |
Number of |
4Q |
One- |
Five- |
Ten- |
Master Trust Total Fund |
749 |
5.17 |
0.92 |
2.18 |
5.48 |
Corporate Plans |
251 |
5.55 |
2.42 |
2.60 |
5.81 |
Foundations |
85 |
4.35 |
0.27 |
1.90 |
5.50 |
Endowments |
96 |
3.63 |
0.24 |
2.32 |
5.74 |
Public Plans |
121 |
5.44 |
0.87 |
1.98 |
5.48 |
Taft-Hartley Plans |
83 |
5.63 |
1.14 |
1.77 |
4.59 |
Health Care Plans |
17 |
3.92 |
0.49 |
1.76 |
N/A |
Universe Custom Composite Benchmark |
6.89 |
2.70 |
2.70 |
5.03 |
BNY Mellon U.S. Master Trust Universe Median Allocations by Asset Class
Period Ending December 31, 2011
Asset Class |
Q4 |
Q3 |
One |
Three |
Five |
U.S. equity |
29% |
29% |
34% |
29% |
38% |
U.S. fixed income |
29% |
29% |
27% |
28% |
23% |
Non-U.S. equity |
15% |
15% |
17% |
15% |
20% |
Non-U.S. fixed income |
2% |
2% |
2% |
2% |
1% |
Real estate |
2% |
2% |
2% |
4% |
2% |
Cash |
2% |
2% |
1% |
2% |
1% |
Alternatives/Other |
21% |
21% |
17% |
20% |
15% |
Russell 3000 Index: Russell Investment Group is the source and owner of the Russell Indexes and all trademarks and copyrights related to its indexes.
Russell Developed ex US Large Cap Index: Russell Investment Group is the source and owner of the Russell Indexes and all trademarks and copyrights related to its indexes.
Barclays Capital U.S. Aggregate Bond Index: © Barclays Bank PLC 2011. This data is provided by Barclays Bank PLC all rights are reserved.
Citigroup Non-US World Government Bond Index: © Citigroup Global Markets Inc., 2011. All rights reserved.