Canadian Plan Sponsor Median Returns Remain in Positive Territory in Q3 2020 According to BNY Mellon Canadian Master Trust Universe

Equities continue to lead other asset classes with strong returns, despite challenging economic conditions

TORONTO, Nov. 2, 2020 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was +3.13% for the third quarter of 2020. While the latest results mark a decline in investment returns from the second quarter, the third quarter saw consecutive positive median returns after the strong market rebound experienced in Q2. The one-year median return as of September 30, 2020 was +6.72%, while the median 10-year annualized return was +8.18%. 

The BNY Mellon Canadian Master Trust Universe results are based on $266.2 billion worth of investment assets in Canadian investment plans, with the average plan size of $3.1 billion. The Universe is designed to provide peer comparisons by plan type and size, and it comprises 86 Canadian corporate, public and university pension plans. Additional insight into the plan results is provided by BNY Mellon's Asset Strategy View, and the Universe product extension, Asset Allocation Trust Universes.

"Despite tremendous challenges and uncertainty experienced during the first nine months of the year stemming from the COVID-19 pandemic, Canadian plan sponsors posted positive results again this quarter," said Catherine Thrasher, Head of Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon. "Canadian plans have displayed resiliency with positive performance results for the third quarter, led by equities in all major markets."

Among traditional asset classes, the U.S. Equity Universe median posted the highest performance, with a quarterly median return of +6.46% and a one-year return of +11.42%. Fixed Income returns were much lower but still positive, posting performance of +0.87% and a one-year return of +8.20%.

With respect to non-traditional asset classes, Private Equity delivered the highest performance for the quarter returning +3.16%. The one-year median return for the Private Equity class was +8.26%. Hedge Funds delivered positive performance, with a quarterly median return of +1.48%, compared to +2.49% in the second quarter. The one-year median return for the Hedge Fund class was +4.93%. Real Estate ended the quarter with a median return of -0.20% and a one-year median return of +3.61%.

Q3 2020 Highlights of the BNY Mellon Canadian Master Trust Universe

• The BNY Mellon Canadian Master Trust Universe of Canadian pension plans over $1 billion outperformed the median return of the Canadian Master Trust Universe by 7 basis points for Q3 2020.
• Canadian Foundations and Endowments posted the highest performance among plans for the third quarter of 2020, with median performance of +4.22%. Canadian Universities also displayed positive results, with a median return of +3.92%.
• All of the equity segment returns in major markets reported gains this quarter displaying positive results across the board.
• Canadian Equity posted a median return of +5.27%, ahead of the S&P/TSX Composite Index result of +4.73%.
• U.S. Equity median performance of +6.46% was the highest performing asset class but trailed the S&P 500 Index result of +6.83%.
• Non-Canadian Equity reported a positive median return of +5.65%, however, this asset class underperformed the MSCI World Index return of +5.96%.
• International Equity posted a quarterly median return of +5.00%, ahead of the MSCI EAFE Index return of +2.86%.
• The Fixed Income median return was +0.87% in the third quarter of 2020, however, this is down from the second quarter results of +7.91%. Fixed Income outperformed relative to the FTSE Canada Universe Bond Index for the third quarter, which returned +0.44%.
• Further insight from the BNY Mellon Asset Allocation Trust Universes indicates that Emerging Markets Equity posted positive median performance for the quarter of +7.39%, behind the MSCI Emerging Markets Index return of +7.59%.
• BNY Mellon Asset Allocation Trust Universes also provide insights regarding alternative asset classes. Private Equity reported a positive quarterly median return of +3.16% and Hedge Funds reported positive performance, returning +1.48% for the third quarter. Real Estate reported a negative quarterly median return of -0.2%.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*

Universe Medians	3Q 2020	One- Year	Three- Years	Five- Years	Ten- Years
Canadian Master Trust Total Fund	3.13	6.72	6.96	7.41	8.18
Canadian Equity	5.27	-0.57	3.57	6.48	6.63
U.S. Equity	6.46	11.42	11.55	12.27	15.74
International Equity	5.00	6.86	4.80	7.68	9.11
Non-Canadian Equity	5.65	9.86	8.50	9.58	11.99
Fixed Income	0.87	8.20	6.98	5.23	5.85
Real Estate	-0.20	3.61	6.92	6.63	-----
Canadian Foundations & Endowments	4.22	5.46	6.30	7.64	8.23
Canadian Universities	3.92	6.51	6.02	7.37	8.02

*All returns are posted gross of fee results, calculated in Canadian dollars.

Information containing any historical information, data or analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Past performance does not guarantee future results. The Information should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), any security, financial product or other investment vehicle or any trading strategy. Some products or services are available only through BNY Mellon.

About CIBC Mellon

CIBC Mellon is dedicated to helping Canadian institutional investors and international institutional investors into Canada service their financial assets throughout the investment lifecycle. Founded in 1996, CIBC Mellon is 50-50 jointly owned by The Bank of New York Mellon (BNY Mellon) and Canadian Imperial Bank of Commerce (CIBC). CIBC Mellon delivers informed investment services for investment funds, pension plans, insurance companies, banks, foundations, endowments, corporations, and global financial institutions whose clients invest in Canada. As at September 30, 2020, CIBC Mellon had more than C$2 trillion in assets under administration. CIBC Mellon is part of the BNY Mellon network, which as at September 30, 2020 had US$38.6 trillion in assets under custody and/or administration. CIBC Mellon is a licensed user of the CIBC trade-mark and certain BNY Mellon trade-marks, is the corporate brand of CIBC Mellon Global Securities Services Company and CIBC Mellon Trust Company, and may be used as a generic term to refer to either or both companies. 

For more information, including CIBC Mellon's latest knowledge leadership on issues relevant to institutional investors active in Canada, visit www.cibcmellon.com.

SOURCE CIBC Mellon

Media Contact: Brent Merriman, Corporate Communications, CIBC Mellon, 416-643-5065, [email protected]

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