NEW YORK, Sept. 15, 2016 /PRNewswire/ -- According to
the BNY Mellon Institutional Scorecard, which is available online
here, the funded status of typical U.S. corporate defined benefit
(DB) plans remained flat in August, at 78.8 percent. While
corporate plan sponsors did see a small return on assets, up 0.1
percent in August, the gain was offset by a similar rise in
liabilities—up 0.2 percent over the course of the month. Assets are
now up 10.1 percent year-to-date, but remain behind liabilities,
which are up 16.6 percent year-to-date.
The funded status of typical corporate DB plans did rise as high
as 79.6 percent in early August, but slid back to 78.8 percent by
the end of the month. Corporate discount rates continued to yield
3.5 percent in August, and have remained flat since the end of
July. According to BNY Mellon estimates, the S&P 500 pension
deficit is also now estimated to have increased by roughly
$2 billion, to $491 billion.
"Relatively speaking, August wasn't a particularly eventful
month in capital markets, as asset returns remained mostly flat,"
said Andrew Wozniak, Head of
Fiduciary Solutions for BNY Mellon Investment Management. "As the
summer comes to a close, investors are now turning their attention
toward the U.S. Federal Reserve to look for clues surrounding
another potential interest rate hike in 2016."
On the public DB side, the typical plan fell short of its
monthly return target of excess returns over a 7.5 percent
annual return by 0.5 percent, as assets gained only 0.1 percent
in August. Even with this miss, typical public DB plans have still
performed well in 2016. They are ahead of their year-to-date return
target by 2.1 percent, and are now only 35 basis points behind
their 12-month return target. Private Equity assets and High Yield
Fixed Income assets were bright spots for typical public DB plan
sponsors, as they returned 1.9 and 2.1 percent, respectively.
Endowments & foundations also fell short of their monthly
target of real return in excess of inflation and 5 percent
spending by 0.6 percent in August. Exposure to Emerging Market
Equities helped to keep endowments & foundations close to their
monthly return target, as the asset class returned 2.5 percent in
August. Exposure to REITS was a notable laggard for endowments
& foundations, falling 3.2 percent in August.
Despite their monthly return target, typical endowments &
foundations are still ahead of their year-to-date return target by
2.4 percent, but are short of their one-year target by 0.1
percent.
Of the other asset classes the scorecard tracks, Global Fixed
Income and Hedge Funds were laggards for investors in August,
losing 0.5 and 0.2 percent, respectively. Small Cap Equities were
up 1.8 percent, Emerging Market Debt was up 1.3 percent, and
International Equities were up 0.6 percent.
Notes to Editors:
BNY Mellon Fiduciary Solutions is a division of The Bank of New
York Mellon.
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial services for
institutions, corporations or individual investors, BNY Mellon
delivers informed investment management and investment services in
35 countries and more than 100 markets. As of June 30, 2016, BNY Mellon had $29.5 trillion in assets under custody and/or
administration, and $1.7 trillion in
assets under management. BNY Mellon can act as a single point of
contact for clients looking to create, trade, hold, manage,
service, distribute or restructure investments. BNY Mellon is the
corporate brand of The Bank of New York Mellon Corporation (NYSE:
BK). Additional information is available on www.bnymellon.com.
Follow us on Twitter @BNYMellon or visit our newsroom at
www.bnymellon.com/newsroom for the latest company news.
All information source BNY Mellon as of June 30, 2016. This press release is qualified
for issuance in the US only and is for information purposes only.
It does not constitute an offer or solicitation of securities or
investment services or an endorsement thereof in any jurisdiction
or in any circumstance in which such offer or solicitation is
unlawful or not authorized. This press release is issued by BNY
Mellon Investment Management to members of the financial press and
media and the information contained herein should not be construed
as investment advice. Past performance is not a guide to
future
performance.
Contact: Scott Pepper
+1
212-635-1743
scott.pepper@bnymellon.com
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SOURCE BNY Mellon