The median return of all plans in the BNY Mellon U.S. Master Trust Universe was 1.62% for the fourth quarter ended Dec. 31, up from -0.83% in the third quarter.
While 93% of the plans in BNY Mellon’s universe had a positive return for the quarter, only 43% matched or outperformed the universe’s custom benchmark of 2.98%.
Corporate pension plans had the highest quarterly median return, at 2.36%. Following were Taft-Hartley plans, with 1.56%; public defined benefit plans, 1.49%; health-care plans, 1.43%; foundations, 1.16%; and endowments, 1.03%.
U.S. equity had the highest median for the quarter at 5.13%, followed by real estate, 3.25%; U.S. fixed income, 1.35%; non-U.S. fixed income, -1.79%; and non-U.S. equities, -2.82%.
The universe’s median asset allocation remained unchanged from the previous quarter with the exception of non-U.S. fixed income, which increased to 2% from 1%, and cash, which dropped to 1% from 2%. U.S. equities, U.S. fixed income, alternatives, non-U.S. equity and real estate remained the same at 26%, 26%, 24%, 17% and 4%, respectively.
For the 12 months ended Dec. 31, the universe had a median return of 6.6%, down from 14.3% at the end of 2013.
Corporate plans outperformed all other plans in 2014 because of their higher allocation to U.S. equities, said John Houser, senior consultant for BNY Mellon’s global risk solutions group, in a news release.
Corporate plans returned a median 8.56% for the year, followed by endowments, 6.51%; public DB plans, 6.48%; foundations, 5.88%; health-care plans, 5.82%; and Taft-Hartley plans, 5.62%.
For the five and 10 years ended Dec. 31, the universe returned an annualized median 9.57% and 6.68%, respectively.
The universe comprises 644 defined benefit plans, foundations, endowments and health-care plans with a combined market value of more than $2.7 trillion. The average plan size was $3.7 billion.
