Positive Q1 Returns for U.S. Master Trust Universe

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 Q1.  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.