Equity market rebound drives strong performance for all plan types during the quarter
NEW YORK, Aug. 19, 2020 /PRNewswire/ -- The BNY Mellon U.S. Master Trust Universe returned a median +10.68% in the second quarter of 2020. This rebound almost entirely reverses the -10.9% loss suffered by plans in the first quarter.
The BNY Mellon U.S. Master Trust Universe offers peer comparisons of performance by plan type and size. It consists of 498 corporate, foundation, endowment, public, Taft-Hartley, and health care plans with a total market value of more than $2.1 trillion and an average plan size of over $6.8 billion. In aggregate, U.S. Master Trust Universe plans reported a one-year return of +4.16%, trailing the 3-year annualized return of +6.16% and 5-year annualized return of +6.15% respectively.
Taft-Hartley plans were the highest performing plan type for the quarter, benefitting from having the highest allocation to U.S. equity of any plan type. Endowments underperformed other plan types; their allocation to U.S. equity was the lowest of all plan types.
"U.S. equity was the highest performing asset class in the second quarter of 2020 while hedge fund performance lagged. Endowment asset allocations were underweight U.S. equity by 9% and overweight hedge funds by 12% versus other plan types, according to BNY Mellon's Asset Strategy View. These differences led to endowments being the lowest performing plan type for the quarter," said Frances Barney, CFA, Head of Global Risk Solutions at BNY Mellon.
"In a study we recently conducted on performance and asset allocation trends of endowments and foundations, we saw asset allocation weights having the opposite effect on performance. E&Fs with <$1B in assets suffered performance-wise in the first quarter of 2020 with higher allocations to public equity, whilst their larger peers, who tend to have higher allocations to alternatives, were somewhat cushioned from the market volatility," Ms. Barney concluded.
Additional Q2 Highlights
Less than 2% of plans posted negative results during the quarter
Taft-Hartley Plans saw the highest median return (+11.08%), followed by Corporate Plans (+11.00%)
U.S. equities posted a quarterly median return of +21.08%, versus the Russell 3000 Index return of +22.03%. Non-U.S. equities saw a median return of +17.51%-23.64%, compared to the FTSE Developed ex U.S. Net Index result of +15.76%. U.S. fixed income had a median return of +4.99%, versus the Barclays Capital U.S. Aggregate Bond Index return of +2.90%. Non-U.S. fixed income had a median return of +11.77%, versus the FTSE World Government Bond Non-US Index return of +2.99%. Real estate had a median return of -1.30%, versus the NCREIF Property Index result of -0.99%.
BNY Mellon U.S. Master Trust Universe users are now able to take advantage of BNY Mellon Asset Strategy View® as a separate service for additional analysis. BNY Mellon Asset Strategy View layers big data analytics onto detailed asset allocation, performance, and cash flow data for the majority of the BNY Mellon U.S. Master Trust Universe. It provides additional insight into underlying market trends and investor activity.
BNY Mellon U.S. Master Trust Universe Median Plan Returns*
Period Ending June 30, 2020
Master Trust Total Fund
Health Care Plans
*All returns are posted gross of fee results.
BNY Mellon Asset Allocation Medians of those invested by Asset Class
Period Ending June 30, 2020
One Year Ago
US Fixed Income
Global Fixed Income
Non-US Fixed Income
TIPS/Inflation Linked Bonds
Other Real Assets
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BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment and wealth management and investment services in 35 countries. As of June 30, 2020, BNY Mellon had $37.3 trillion in assets under custody and/or administration, and $2.0 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
Barclays Capital U.S. Aggregate Bond Index
© Barclays Bank PLC 2016. This data is provided by Barclays Bank PLC all rights are reserved.
FTSE Non-US World Government Bond, FTSE Developed x US Index, Russell 3000 Index:
Source: London Stock Exchange Group plc and its group undertakings (collectively, the "LSE Group"). © LSE Group 2019. FTSE Russell is a trading name of certain of the LSE Group companies. "FTSE®" "Russell®", are trade mark(s) of the relevant LSE Group companies and is/are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written
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SOURCE BNY Mellon