Treasury Bonds Provide Unique Hedge During Stress Events, According to Mellon Capital Management

Treasury Bonds Provide Unique Hedge During Stress Events, According to Mellon
Capital Management
BNY Mellon Asset Management Boutique Sees Characteristics Not Found Elsewhere

SAN FRANCISCO, Oct. 8 /PRNewswire-FirstCall/ -- Treasury bonds provide
protection against economic shocks, a diversification characteristic that is
typically not found in other asset classes, according to a recent analysis by
Mellon Capital Management Corporation (MCM), part of BNY Mellon Asset
Management.

"Our analysis demonstrates that while the correlation between stocks and
Treasury bonds has varied over time, Treasuries consistently provided
protection during periods of economic stress. Other asset classes
historically used as substitutes for Treasury bonds often failed to provide
the hedge investors were seeking," said Ralph Goldsticker, managing director,
strategic investments, at MCM. He did caution that Treasury bonds also
expose investors to risks during periods of rising inflation and, therefore,
may not provide protection in all periods of economic stress.

Goldsticker pointed to the periods of April 2000 to December 2003, when the
tech and Internet bubble burst, and July 2007 to June 2009, the recent
sub-prime and Lehman crises, as examples that illustrate the divergence
between stock and Treasury bond performances during stress events.

"Both periods included economic crises that had bad news for stocks," he said.
"Stock prices fell because investors' expectations of future earnings and
growth rates fell. Stock prices were further depressed as perceived risk rose
and investors demanded a higher rate of return. On the other hand, Treasury
bonds rose in value as the Fed lowered interest rates, and increased risk
aversion sent investors to bonds."

Goldsticker said that both statistical and economic analyses demonstrate how
the addition of Treasury bonds potentially can protect an equity portfolio
during periods of economic stress.

Notes to Editors:

Founded in 1983 by innovators in the investment management field, Mellon
Capital Management applies a disciplined and analytical approach to global
investment management strategies. As of June 30, 2009, the firm had $153
billion in assets under management, including assets managed by dual officers
of Mellon Capital Management and BNY Mellon, and $10 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 the corporate brand of The Bank of New York Mellon Corporation
(NYSE: BK). BNY Mellon is a global financial services company focused on
helping clients manage and service their financial assets, operating in 34
countries and serving more than 100 markets. The company 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 $20.7 trillion in assets under custody
and administration, $926 billion in assets under management, services $11.8
trillion in outstanding debt, and processes global payments averaging $1.8
trillion per day. Additional information is available at bnymellon.com.

All information source BNY Mellon Asset Management as of June 30, 2009, except
where noted. This press release is issued by BNY Mellon Asset 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.

SOURCE BNY Mellon

Mike Dunn, +1-212-922-7859, mike.g.dunn@bnymellon.com