BNY Universe Shows Positive Q3 Returns

This figure shows a return to positive territory after essentially flat results in the second quarter. For the 12 months ending September 30, 2013, the median plan returned 11.63%.

“Public plans benefited during the quarter from a relative overweighting of non-U.S. equities compared to other plan types,” says John Gruber, head of product strategy for BNY Mellon’s Global Risk Solutions group. “The difference between their performance of 4.89% and the lowest performing plan type was a significant 67 basis points. Still, all but six plans within the universe saw positive returns for third quarter.”

Results of the universe for third quarter also show 99% of plans in it returned positive results during the quarter, 48% of plans matched or outperformed the custom policy return for third quarter, and public funds recorded the highest median return for the quarter at 4.89%, followed by foundations at 4.88%.

In addition, the universe indicates U.S. equities posted a quarterly median return of 6.80%, compared with the Russell 3000 Index return of 6.35%. Non-U.S. equities posted a median return of 9.90%, behind the Russell Developed ex U.S. Large Cap Index result of 11.61%. U.S. fixed income had a median return of 0.69%, compared with the Barclays Capital U.S. Aggregate Bond Index return of 0.57%. Non-U.S. fixed income posted a median return of 2.04%, compared with the Citigroup Non-U.S. World Government Bond Index return of 4.06%. Finally, real estate posted a median return of 3.46%, versus the NCREIF Property Index result of 2.59%.

The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the third quarter was U.S. equity 28%, U.S. fixed income 25%, non-U.S. equity 18%, non-U.S. fixed income 2%, real estate 3%, cash 1% and alternatives/other 23%.

With a market value of more than $2.3 trillion and an average plan size of $3.8 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 613 corporate, foundation, endowment, public, Taft-Hartley and health care plans.