BNY Mellon Master Trusts Show Q3 Muscle

The median return of the BNY Mellon U.S. Master Trust Universe was 4.66% for the third quarter.

This drove up performance for the typical fund to 10.45% on a year-to-date basis. Given the strong quarter, the median plan climbed 15.97% during the 12 months ending September 30.  

“All asset classes were positive in Q3, but equities drove returns, with international equity setting the high-water mark at 7.32% and U.S. equities up 6.19% for the period. Over the full year, U.S. equities have significantly outperformed bonds with a 29.24% median return,” said John Houser, vice president and manager of performance and risk analytics for BNY Mellon.   

Ninety-nine percent of plans in the BNY Mellon Master Trust universe returned positive results during the quarter. Over the previous 12-month period, 99% (649 out of 650) of plans were in the black. More than half (55%) of plans matched or outperformed the custom policy return for the quarter. For the full year, 23% of plans outperformed the custom policy.  

Corporate plans recorded the highest median return (+4.94%) for the quarter, followed closely by Public Plans (+4.80). The difference between the best performing and lowest performing plan type (Endowments) was only 0.77 percentage points.

Non-U.S. equities posted a quarterly median return of 7.32%, behind the Russell Developed ex U.S. Large Cap Index result of 7.76%. U.S. equities posted a median return of 6.19%, versus the Russell 3000 Index return of 6.23%. Non-U.S. fixed income posted a median return of 4.64%, compared to the Citigroup Non-U.S. World Government Bond Index return of 3.98%. U.S. fixed income had a median return of 2.65%, versus the Barclays Capital U.S. Aggregate Bond Index return of 1.59%. Real estate posted a median return of 2.40%, versus the NCREIF Property Index result of 2.34%.    

The average asset allocation for plans in the Universe for the third quarter was U.S. equity 28%, U.S. fixed income 28%, non-U.S. equity 15%, non-U.S. fixed income 2%, real estate 2%, cash 1% and alternatives/other 24%. 

The BNY Mellon U.S. Master Universe has a market value of more than $2.2 trillion and an average plan size of $3.3 billion. The Universe consists of more than 680 corporate, foundation, endowment, public, Taft-Hartley and health care plans.