Balanced Pooled Funds Bounce Back Into the Black With Returns of 9.4% in Q3 2010

Oct 27, 2010, 10:21 ET from BNY Mellon Asset Servicing

LONDON, Oct. 27 /PRNewswire/ -- BNY Mellon Asset Servicing's quarterly pooled fund survey show that balanced pooled funds have bounced back into the black with a positive return of 9.4% for Q3 2010.  Q2 2010 posted a return of -8.9% and was the first negative quarter that BNY Mellon had recorded since Q1 2009.

Data from BNY Mellon's Pooled Pension Fund Database, which covers the largest and most representative sample available to UK pension funds' trustees, shows that balanced pooled funds were positive for one-year, three-year, five-year and ten-year with returns of 9.7%, 1.0%, 5.1% and 3.7% respectively.

For Q3 2010 returns were positive for most of the major equity sectors. UK Smaller Companies posted the highest return with 15.2%. The lowest equity return was provided by Japanese Equities with -0.1%, the only equity class to post a negative, albeit only -0.1%.

Net median performance against index performance for Q3 2010 is detailed below (there were not enough funds in the Pan European Equity sector to calculate a median):

Universe Name

Net Median Return (%)

Index Return (%)




UK Smaller Companies



UK Equity Standard



Overseas Equity



Global Equity



North American Equity



European ex UK Equity



Pan European Equity



Japanese Equity



Pacific Basin (ex Japan) Equity



Emerging Market Equity



UK Bonds Standard



UK Bonds Long Term



International Bond



Index Linked









Active UK Equity managers posted a return of 13.8% for Q3 2010. This return beat its index which posted 13.6% for the quarter. The one-year return for Q3 2010 also came in positive at 11.8% however it failed to beat its index which returned 12.5%. The three-year return was negative at -0.8% per annum though both the five and ten-year returns were positive with 4.5% per annum and 2.6% per annum respectively.

During Q3 2010, Global Equity returned 10.3%, outperforming its index which returned 8.8%. For the twelve-month period to 30 September 2010, Global Equity achieved 10.4% while the Index achieved 10.6%. The three-year period return was negative with -0.1% per annum. The five-year return for Q3 2010 was positive with 5.2% per annum while the ten-year return came in at 2.4% per annum. Of these longer term returns only the ten-year beat its index.

During the third quarter of 2010 UK Bond pooled fund managers returned 4.6% which outperformed the comparative market index by 1.0%.  International Bond pooled fund managers also record a positive return achieving 2.4%. International Bonds matched their Index which also returned 2.4%. Cash posted a return of 0.1% for Q3 2010 which also matched its Index.

Property pooled fund managers continued their run of positive returns recording 1.8% during the quarter which beat its index by 0.2%. Over the twelve-month period to 30 September 2010, the median return for this sector was also positive with a return of 17.8%. The last negative quarter for Property was Q2 2009.

Commenting on the performance of pooled funds, Alan Wilcock, Performance and Risk Analytics Manager at BNY Mellon Asset Servicing, said: "The bounce back in the equity markets in the third quarter was welcome news, meaning that all asset classes with the sole exception of European ex UK Equity funds, were in positive territory for the first nine months of 2010."

Weightings continue to slide in UK Equities

Within BNY Mellon's balanced pooled fund universe, the weightings in UK Equities fell 0.2% from the previous quarter to 36.9%. This can be attributed mainly to relative performance during the quarter.

Weightings in Overseas Equities fell during the quarter by 1.3%, with North American Equity showing a decrease in its holdings of 0.7%. North American Equity primarily fell due to manager movements. Emerging Market weightings rose over the period by 0.2%. This was mainly due to manager movements.

Within Bonds, weightings for the UK fell by 1.1% to 7.8% over the quarter mainly due to manager movements. International Bonds also fell this time by 0.5% to 3.6%.  Weightings in Index-Linked Gilts fell by 0.1% to 0.5%.  Weightings in Property rose over the quarter by 0.1%.

BNY Mellon Asset Servicing's Pooled Pension Fund Database covers the largest and most representative sample available to UK pension funds' trustees.  BNY Mellon Asset Servicing currently covers 57 separate asset managers who manage over 367 pounds Sterling billion in pooled funds, both balanced and specialist.

Notes to editors:

BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of specialised asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services. The performance analysis and other information in this press release are based on historical data and are intended for informational purposes only. Past performance is not a guarantee of future performance. This press release does not constitute investment advice, nor is it an offer or recommendation of any security, investment product, service or firm.

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, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team.  It has $24.4 trillion in assets under custody and administration and $1.14 trillion in assets under management, services $12.0 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day.  BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation.  Additional information is available at

* To generate a median BNY Mellon first calculates the returns for the underlying funds within the respective sector for the time period required. BNY Mellon then selects the median fund from these funds. BNY Mellon only generates a Median if there are nine of more funds available within the sector and BNY Mellon does not chain link medians to get longer term returns.
This press release is issued by The Bank of New York Mellon to members of the financial press and media.
All information and figures source The Bank of New York Mellon as at 30 September 2010 unless otherwise stated.
The Bank of New York Mellon, London Branch, registered in England and Wales with FC005522 and BR000818
Branch office: One Canada Square, London E14 5AL
Authorised and regulated in the UK by the Financial Services Authority.

SOURCE BNY Mellon Asset Servicing