Mellon Capital's LDI Strategy Attracts Assets From Pension Plans Allocating Away From Equities, Traditional Core Fixed Income

SAN FRANCISCO, Aug. 10 /PRNewswire-FirstCall/ -- The High Quality Long Corporate Strategy managed by Mellon Capital Management Corporation, part of BNY Mellon Asset Management, has been attracting increasing assets from corporate pension plans seeking to reduce volatility by reallocating assets away from equities and traditional core fixed income.  

Assets under management for the strategy, launched in January 2009, now exceed $1 billion.

Lowell J. Bennett, managing director and fixed income strategist for Mellon Capital, said, "This strategy is particularly attractive now because of the big swings we have been seeing both in the bond and stock markets, which have driven down the funding status for the typical US corporate plan to approximately 74 percent, according to the latest statistics from BNY Mellon Pension Services."

Bennett added, "Our investment portfolio for this strategy normally includes the types of securities that are used to establish the discount rate for pension liabilities, making this a better liability match than many other long-duration vehicles.  This helps plans hedge against market volatility."

The High Quality Long Corporate Strategy is designed to gain market exposure to high-quality corporate bonds rated single A and higher and a maturity of at least 20 years.  It is designed to exclude the riskiest 20 percent of issuers and aims to have no more than a two percent exposure to any one issuer.  

"We believe this approach creates an opportunity for a higher-quality, more-diversified portfolio than market-weighted benchmarks," said Lowell.  "That higher quality focus is important because the plan liabilities are firm commitments and avoiding downgrades and defaults preserves plan value."

Notes to Editors:

Founded in 1983 by innovators in the investment management field, Mellon Capital Management Corporation applies a disciplined and analytical approach to global investment management strategies. As of June 30, 2010, the firm had $170.6 billion in assets under management, including assets managed by dual officers of Mellon Capital Management Corporation , The Bank of New York Mellon and The Dreyfus Corporation, and $9.1 billion in overlay strategies. Additional information about Mellon Capital is available at www.mcm.com.  It is part of BNY Mellon Asset Management, one of the world's largest asset managers.

BNY Mellon Asset Management is the umbrella organization for BNY Mellon's affiliated investment management firms and global distribution companies.

BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $21.8 trillion in assets under custody and administration and $1.0 trillion in assets under management, services $11.6 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available at www.bnymellon.com.

All information source BNY Mellon Asset Management at June 30, 2010. This press release is qualified for issuance in the UK and US 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 authorised. This press release is issued by BNY Mellon Asset Management (US) and BNY Mellon Asset Management International Limited (ex-US) 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. Registered office of BNY Mellon Asset Management International: The Bank of New York Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorised and regulated by the Financial Services Authority

A BNY Mellon Company(SM)

SOURCE BNY Mellon

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