The Master Trust’s tremendous turnaround was in due in large part to all 459 corporate, foundation/endowment, and public funds that make up the Trust turning in a positive performance. In the strongest plan performance since the fourth quarter of 1998, the Trust easily outpaced the negative 1.67% return recorded in the first quarter of 2003 (See Bears Batter Master Trust to Start 2003 ), according to a news release.
However, compared to its benchmark for the quarter, the median total fund underperformed the 12.45% quarterly return of the composite benchmark – made up of the Russell 3000 Index 60%, LB Aggregate 30% and MSCI EAFE 10%.
Turning to the funds’ components, a pproximately 26% of the plans outperformed the benchmark for second quarter. The universe now represents a market value of $1.12 trillion with an average size of $2.45 billion.
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 16.70%, one-upping the Russell 3000 Index quarterly return 16.20%, while the median plan in the Non-US Equity asset class ended 19.30% higher, underperforming the FTSE World ex-US quarterly 20.10% return.
Also besting its benchmark was the median return in the US Fixed Income asset class, returning 3.07%. By comparison, the LB Aggregate had a quarterly return of 2.50%.
The average asset allocation in the US Master Trust Universe for the second quarter was:
- US Equity, 42%
- US Fixed Income, 26%
- Non-US Equity, 18%
- Alternative Investments, 5%
- Other (Private Equity, Oil, Gas, etc.), 2%
- Real Estate, 3%
- Cash, 3%
- Non-US Fixed Income, 1%.