Plan Sponsor Returns Declined in First Quarter

This is the first dip since the third quarter of 2017, according to BNY Mellon

The BNY Mellon U.S. Master Trust returned a median -0.39% in the first quarter of this year, the first negative result in 10 quarters. The BNY Mellon U.S. Master Trust consists of 626 corporate, foundation, endowment, public, Taft-Hartley and health care plans with a total market value of $2.1 trillion and an average plan size of more than $6 billion.

For the trailing one year, the Trust’s return was 10.13%, surpassing its three-year annualized return of 6.37% and five-year annualized return of 7.64%.

In a reversal from the fourth quarter of 2017, corporate and health care plans underperformed, with quarterly returns of -1.14% and -0.71%, respectively.

“Endowments benefited from higher allocations to alternatives and lower allocations to U.S. fixed income investments versus other plan types,” says Frances Barney, head of global risk solutions at BNY Mellon. “These plans overweighted alternatives at a 44% allocation versus 21% for the Master Trust Universe as a whole and underweighted U.S. fixed income at 9% versus 27% for the whole. Non-U.S. equity was the top-performing asset class, with double-digit gains over the one-year period of 17.58%, followed by U.S. equity continuing its run of positive returns (13.85%) [and] non-U.S. fixed income (8.57%).”

The data also indicated that more than 29% of plans posted positive results in the first quarter. Endowments saw the highest median return (0.52%) followed by foundations (-0.12%). The median return for public plans was -0.14%, and the median return for Taft Hartley plans was -0.19%.