Positive First-Quarter Returns for U.S. Master Trust Universe

The median return of BNY Mellon’s U.S. Master Trust Universe was 7.12% for the first quarter of 2012. 

This marked the second consecutive quarter of positive returns.  For the 12 months ending March 31, 2012, the median plan was up 4.33%.

“Building on 2011’s strong finish, all segments of the Universe posted appreciable returns for Q1, with public plans leading the way at 7.70%, followed by foundations which trailed by less than half a percent,” said John Houser, vice president and manager of performance and risk analytics for BNY Mellon. “For the 12-month period, corporate pension plans far outpaced other segments with a return of 6.01%, getting a boost from their relative overweighting of U.S. fixed-income holdings.”

Other highlights include:

•  Nearly 99% of plans had positive results for the first quarter. For the 12-month period, 96% of plans were in the black.

•  Forty-two percent of plans matched or outperformed the custom policy return of 7.53% for the first quarter.  For the full year, 24% of plans outperformed the custom policy.

•  Public plans were the leading plan type for the first quarter with a median return of 7.70%, followed by foundations, Taft-Hartley, corporate pensions, health care and endowment plans.

•  U.S. equities were the dominant asset class for the quarter with a median return of 12.95%, vs. the Russell 3000 Index return of 12.87%.  Non-U.S. equities posted a median return of 11.97%, ahead of the Russell Developed ex-U.S. Large Cap Index result of 10.76%.  U.S. fixed income had a median return of 1.36%, vs. the Barclays Capital U.S. Aggregate Bond Index return of 0.30%.  Non-U.S. fixed income posted a median return of 3.40%, compared with the Citigroup Non-U.S. World Government Bond Index return of -0.22%. 

The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the first quarter was: U.S. equity 29%, U.S. fixed income 27%, non-U.S. equity 16%, non-U.S. fixed income 2%, real estate 2%, cash 2% and alternatives/other 22%.

With a market value of $2.29 trillion and an average plan size of $3.19 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 719 corporate, foundation, endowment, public, Taft-Hartley and health care plans.