Investing February 13, 2015

Weak Q4 Dampened Master Trust Returns in 2014

Returns in the BNY Mellon U.S. Master Trust Universe were positive in 2014, but a weak forth quarter pushed performance well below 2013 levels.
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The 2014 fourth quarter results for the BNY Mellon U.S. Master Trust Universe portray weak results for returns, with the median quarterly return at 1.62%. 

This factor resulted in yearly performance for the typical fund of +6.6%, below the +14.3% returned in 2013. More favorable statistics from the quarter were evident in the 93% of plans that returned positive results, while 43% of plans matched or outperformed the custom policy return for Q4.

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The BNY Mellon U.S. Master Trust Universe, a fund-level tracking service, notes corporate plans recorded the highest median return (+2.36%), followed by Taft-Hartley plans (+1.56%). Senior Consultant for BNY Mellon’s global risk solutions group John Houser adds, “Corporate funds outpaced other plan types with a return of +8.56%, getting a boost from their relative over-weighting of U.S. equity holdings.” He continues, “Following behind corporates, endowment funds returned +6.51% on average, while Taft Hartley plans lagged all plan type at +5.62%.”

Additional results from Q4 include:

  • U.S. equities posted a quarterly median return of +5.13%, and non-U.S. equities displayed a median return of -2.82%.
  • U.S. fixed income had a median return of +1.35%, while non-U.S. fixed income had a median return of -1.79%.
  • Real estate had a median return of +3.25%

BNY Mellon is a global investments company and its U.S. Master Trust Universe service consists of 644 corporate, foundation, endowment, public, Taft-Hartley, and health care plans with a market value of more than $2.7 trillion and an average plan size of $3.7 billion.

Benefits February 12, 2015

HSAs See Solid Investment Returns

Health savings accounts saw a year over year increase of 25% in assets—including from contributions and investments.
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Health savings accounts (HSAs) held $24.2 billion in assets as of December 31, 2014, including $21 billion in contributions and $3.2 billion from investments, according to an analysis of the HSA market from Devenir.

This is an increase of 25% for HSA assets from December 31, 2013. Devenir says that during 2014, health plans were the leading driver of new HSA account growth, accounting for 35% of new accounts.

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The average balance of an HSA investment account holder is $12,995, including contributions and investments.

These accounts achieved an average annualized return of 12.5% over the last three years, according to the analysis. In 2014, $19.4 billion was contributed to HSA accounts, while $13.2 billion was withdrawn, leaving $6.2 billion carried forward into 2015. (See “Feasibility of HSAs as Retirement Savings Strategy”)

The Devenir research report is available here.

 

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