The median plan for the 504 corporate, foundation, endowment, public, Taft-Hartley, and healthcare funds that make up the Mellon Analytical Solutions’ US Master Trust Universe posted a positive return of 3.98% for the third quarter. Of the plans in the group, 99% achieved positive results. The US Master Trust Universes represent a market value of $1.6 trillion with an average plan size of $3.1 billion.
“Asset allocation decisions were the primary drivers of plan performance,” said Tim Clark, senior client relationship manager at Mellon Analytical Solutions. “Plans that had higher allocations across the non-US equity and US equity asset classes tended to have the best performance. Despite rising oil costs, hurricane damages and a falling consumer confidence index, the majority of plans reported respectable gains for the quarter.”
Median results for non-US equities posted a 10.84% return, below the MSCI AC W XUS Index return of 11.83%. US equities generated a return of 4.42%, ahead of the Russell 3000(R) Index return of 4.01%. Non-US fixed income returned 1.72%, outperforming the Citigroup World Government non-US return of -1.13%. The only asset class with a negative return was US fixed income with -0.33%, versus the Lehman Brothers aggregate return of -0.67%.
Endowments plans were the top performing plan type for the third quarter with a 4.62% median return, followed by public, foundations, corporate, Taft- Hartley and healthcare.
The universe’s median total fund also beat the 2.83% quarterly return of its benchmark (Russell 3000 Index 50%, Lehman Brothers Aggregate 40%, MSCI World ex-U.S. 10%). Approximately 82% of the plans outperformed the benchmark for the third quarter.
The average asset allocation in the US Master Trust Universe for the third quarter was: US equity 42%, US fixed income 24%, Non-US equity 20%, non-US fixed income 1%, alternative investments 5%, real estate 2%, cash 1%, and other (private equity, oil, gas, etc.) 5%.