Master Trusts End 2012 on Positive Note

Performance for the typical fund was 12.57% on a year-to-date basis —the best annual performance in two years. The median plan posted positive quarterly returns for three of four quarters in 2012.     

“For 2012, corporate plans came out on top with a median return of 13.4%, followed by public plans, driven by a 16.5% annual gain in U.S. equities, compared to 7.9% for U.S. fixed income,” said John Houser, vice president and manager of Performance and Risk Analytics for BNY Mellon. Endowments recorded the highest median return for the quarter (2.26%), followed by foundations (2.20%).   

Ninety-seven percent of plans in the BNY Mellon Master Trust universe returned positive results during the quarter. Over the prior 12-month period, 99% (611 out of 613) of plans were in the black.

Eighty-nine percent of plans matched or outperformed the custom policy return for Q4.For the full year, 65% of plans outperformed the custom policy. 

Non-U.S. equities posted a quarterly median return of 5.07%, behind the Russell Developed ex-U.S. Large Cap Index result of 5.96%. U.S. equities posted a median return of 0.78%, versus the Russell 3000 Index return of 0.25%. Non-U.S. fixed income posted a median return of 1.83%, compared with the Citigroup Non-U.S. World Government Bond Index return of -2.36%. U.S. fixed income had a median return of 0.81%, versus the Barclays Capital U.S. Aggregate Bond Index return of 0.21%. Real estate posted a median return of 2.37%, versus the NCREIF Property Index result of 2.54%.   

The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the fourth quarter was: U.S. equity 26%, U.S. fixed income 28%, non-U.S. equity 16%, non-U.S. fixed income 2%, real estate 3%, cash 1% and alternatives/other 24%. 

With a market value of more than $2.2 trillion and an average plan size of $3.4 billion, the BNY Mellon U.S. Master Trust Universe consists of more than 649 corporate, foundation, endowment, public, Taft-Hartley and health care plans.