U.S. Master Trust Universe Returns to Positive Territory for Q3, According to BNY Mellon Asset Servicing

BOSTON, Nov. 19, 2010 /PRNewswire-FirstCall/ -- The median return of the BNY Mellon Master Trust Universe was 8.48% for the third quarter of 2010, up strongly from the -4.87% return reported the previous quarter and a quick rebound into positive territory.  With the rebound, the median return is 6.70% on a year-to-date basis and 10.32% for the twelve months ending September 30, 2010.

With a market value of $1.19 trillion and an average plan size of $1.64 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 728 corporate, foundation, endowment, public, Taft-Hartley and health care plans.

"All investors experienced positive performance for the quarter, with corporate plans leading with a return of just under nine percent," said Greg Stewart, managing director and regional product manager of BNY Mellon Asset Servicing.  "Both corporate and public plan sponsors benefited from strong equity returns in Q3 as both have the greatest allocations to this asset class."

Highlights

• 100% of plans posted positive results for the quarter ending September 30, 2010.  All but a single plan (99.85%) also saw positive returns on a year-to-date basis.
• Less than 25% of plans matched or outperformed the custom policy return of 9.56% for the third quarter, a significant drop compared to Q2. Year-to-date, a more typical 84% of plans met or exceeded the policy return of 5.29%.
• Corporate plans were the leading performer for the third quarter, posting a median return of 8.95%, closely followed by public funds, Taft Hartley, health care, and foundations and endowments.
• Non-U.S. equities were the dominant asset class for the quarter with the median return up 16.29% compared to the MSCI World ex USA return of 16.21%. U.S. equities posted 11.58% for the quarter with the Russell 3000 Index up 11.53%.  The median return for non-U.S. fixed income was 8.59% compared to the Citigroup Non-U.S. World Government Bond Index return of 10.45%.  U.S. fixed income was the lowest performing asset class for the quarter with a median return of 3.51%, versus the Barclays Capital U.S. Aggregate Bond Index return of 2.48%.  

"Once again the quarter's performance was a story of equity market returns, although to the comfort of investors, we saw double-digit gains as opposed to the losses of last quarter," said Stewart.  "Concerns continued regarding the fragility of the recovery, but news that the U.S. economy is improving, albeit slowly, helped drive returns higher by quarter's end.  A weaker dollar also helped U.S. investors overseas."

The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the third quarter was: U.S. equity 32%, U.S. fixed income 28%, non-U.S. equity 17%, non-U.S. fixed income 2%, alternative investments 10%, real estate 2%, cash 1%, and other (oil, gas, etc.) 8%.

BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of specialized asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services. BNY Mellon Asset Servicing provides services through BNY Mellon and other related companies.

BNY Mellon (NYSE: BK) 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. Learn more at www.bnymellon.com.

SOURCE BNY Mellon