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Plans in the U.S. Master Trust Universe Continue to Lose Ground, According to BNY Mellon Asset Servicing

2008-08-13 08:05:00

        All plan types post negative results for the second quarter

    BOSTON, Aug. 13 /EMWNews/ -- The median plan for the 599

corporate, foundation, endowment, public, Taft-Hartley and healthcare funds

that make up the BNY Mellon Master Trust Universe posted a combined -0.77%

return for the second quarter of 2008, marking the third straight quarter

of negative returns. Despite the negative performance, the median plan

outperformed the universe's custom benchmark by nearly 60 basis points,

beating its -1.35% second quarter return.

    The BNY Mellon Master Trust Universe represents a market value of $1.6

trillion, with an average plan size of $2.7 billion.

    "All plan types posted negative results for Q2, though the returns are

a marked improvement over the first quarter," said Greg Stewart, first vice

president and regional product manager of BNY Mellon Asset Servicing.

Endowments were the strongest performing plan type, posting a -0.25%

return, while corporate plans trailed all segments with a return of just

under -1.00%. Year-to-date, all segments are down, with healthcare plans

being the best relative performer, a pattern repeated over a one-year



    -- Of the plans in the universe, 77% posted negative results for the

period ending June 30, 2008.

    -- Endowments were the top performing plan-type for the second quarter

with a -0.24% median return, followed by healthcare, foundations, public,

Taft-Hartley, and corporate plans.

    -- US fixed income led all asset classes for the quarter with a median

return of -0.92%, outperforming the Lehman Brothers(R) Aggregate return of

-1.02. Non-US fixed income posted a median return of -3.13, ahead of the

Citigroup(R) Non-US Dollar World Government Bond Index return of -4.72. US

equities returned -0.94%, compared to the Russell 3000(R) Index* return of

-1.69%. Non-US equities returned -1.42%, lagging the MSCI(R) All Country

World Index ex US return of -0.01%.

    "Equity returns were down again this quarter, but in contrast to

previous quarters, non-US fixed income was the worst performing asset

class, losing more than 3%," said Stewart. "Over the longer periods,

equities have clearly underperformed, down over 10% year-to-date, with

bonds just in the black. Thus, we continue to see fund types with greater

equity allocations do relatively worse than those that underweight equity

and overweight fixed income."

    The average asset allocation in the BNY Mellon Master Trust Universe

for the second quarter was: US equity 35%, US fixed income 26%, non-US

equity 18%, non-US fixed income 1%, alternative investments 8%, real estate

3%, cash 2%, and other (private equity, oil, gas, etc.) 7%.

    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 offers its products and services

through The Bank of New York Mellon and other subsidiaries of The Bank of

New York Mellon Corporation.

    The Bank of New York Mellon Corporation (NYSE: BK) is a global

financial services company focused on helping clients manage and service

their financial assets, operating in 34 countries and serving more than 100

markets. The company 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 more than $23 trillion in assets under custody

and administration, more than $1.1 trillion in assets under management and

services $12 trillion in outstanding debt. Additional information is

available at

BNY Mellon Trust Universe Median Plan Returns Period Ending June 30, 2008 Number of 2Q One- Five- Ten- Universe Participants 2008 Year Years Years Master Trust Total Fund 599 -0.77 -4.37 9.54 6.07 Corporate Plans 255 -0.97 -5.02 9.30 5.87 Foundations 88 -0.62 -3.95 9.63 6.89 Endowments 86 -0.25 -2.64 11.68 6.87 Public Plans 75 -0.69 -4.41 10.34 6.52 Taft-Hartley Plans 46 -0.89 -5.55 7.98 5.41 Healthcare Plans 19 -0.56 -2.12 7.83 5.38 Universe Custom Composite Benchmark -1.35 -5.58 7.27 4.61 *Russell Investment Group is the owner of the trademarks, service marks, and copyrights related to its indexes.

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