Master Trust Q3 Performance Off Q2's Strength

According to data from Russell/Mellon Analytical Services, the Russell/Mellon US Master Trust Universe turned in a third-quarter gain of 3.22%. The $1.4-trillion universe covers 534 corporate, foundation/endowment, public and Taft-Hartley funds with an average $2.6-billion plan size.

The Russell/Mellon news release said 521 of the 534 plans were in the black during the period, just off the Q2 pace whenevery fund covered had a positive return (See Master Trust Runs With The Bulls In Q2 ). The second quarter showing was the strongest since the fourth quarter of 1998.

Compared to its composite benchmark for the third quarter, the median total fund bested the benchmark’s 2.5% quarterly return. The benchmark is made up of the Russell 3000 Index 60%, LB Aggregate 30% and MSCI EAFE 10%. For a 12-month period, the median total fund was up 18.19% while a 10-year return was 8.71% – both of which beat the benchmark at 17.84% for a year and 8.32% for 10 years.

Turning to the funds’ components, 387 plans outperformed the benchmark for third quarter. 

Quarterly Performance

Both the US and Non-US equity asset classes were positive for the quarter with mixed performance against their benchmarks.  The US Equity asset class gained 4%, one-upping the Russell 3000 Index’s quarterly return of 3.4% while the median plan in the Non-US Equity asset class ended 8.4% higher, slightly outperforming the FTSE World ex-US quarterly’s 8.14% return.

Also besting its benchmark was the median return in the US Fixed Income asset class, returning 0.06%.  By comparison, the LB Aggregate had a quarterly return of -0.15%.

The average asset allocation in the US Master Trust Universe for the third quarter was: 

• US Equity, 42%
• US Fixed Income, 26%
• Non-US Equity, 18%
• Alternative Investments, 4%
• Other (Private Equity, Oil, Gas, etc.), 3%
• Real Estate, 3%
• Cash, 2%
• Non-US Fixed Income, 2%.