Canadian Plan Sponsors Post Lower Median Returns Amid Slowing Global Growth
Despite market volatility, traditional assets outperformed the alternative assets for the quarter.
TORONTO, Aug. 7, 2019 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was +2.34% for the second quarter of 2019, down from higher returns recorded during the first quarter. The 1 year median return as of June 30, 2019 was +6.14%, while the median 10-year annualized return was +8.95%.
The BNY Mellon Canadian Master Trust Universe results are based on $242.7 billion worth of investment assets in Canadian investment plans, with the average plan size of $2.9 billion. The Universe is designed to provide peer comparisons by plan type and size, and it comprises 84 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.
"Equity markets around the globe fluctuated during the second quarter, reporting only modest performance as compared to last quarter's higher returns. Despite market volatility and slowing global growth, all traditional asset classes posted positive results for the quarter and outperformed alternative assets," said Catherine Thrasher, Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon.
Canadian Fixed Income delivered the highest asset class performance, with a quarterly median return of +2.92% and with a one-year return of +8.33%. Canadian equity performance was lower this quarter but still positive, with a quarterly median return of +1.95%. U.S. Equity also achieved positive results during the second quarter of 2019, returning +1.36% however this was behind the U.S. market index result. International and Non-Canadian Equity median returns were behind the Non-North American equities market but were still positive, at +1.20% and +1.41% respectively.
Q2 2019 Highlights of the BNY Mellon Canadian Master Trust Universe
- Median returns of the BNY Mellon Canadian Master Trust Universe outperformed Canadian plans over $1 billion by 18 basis points for Q2 2019.
- Canadian Foundations and Endowments trailed among plans for the second quarter of 2019, posting modest median performance of +1.42%. Canadian Universities were further ahead, with a higher return of +2.03%.
- The Fixed Income median return was +2.92% in the second quarter of 2019. Fixed Income outperformed relative to the FTSE Canada Bond Universe Index, which returned +2.51%.
- Equity segment returns were much lower this quarter as compared to the first quarter of 2019, however still displaying positive results across the board. Canadian Equity posted the highest quarterly median return of +1.95%, but still ended well behind the S&P/TSX Composite Index return of +2.59%. U.S. Equity performance of +1.36% was also behind the S&P 500 Index result of +2.02%. International Equity and Non-Canadian Equity also achieved positive results, with respective median corresponding returns of +1.20% and +1.41%. However, these results also finished below the MSCI EAFE Index and MSCI World Index returns of +1.69% and +1.92%.
- Further insight from the BNY Mellon Asset Allocation Trust Universes indicates that Emerging Markets Equity posted a negative median return for the quarter of -0.68%, outperforming the MSCI Emerging Markets Index return of -1.47%.
- BNY Mellon Asset Allocation Trust Universes also provides insight regarding alternative asset classes. Real Estate reported a positive median return of +1.14%, followed by Private Equity at +0.76%. Hedge Funds also reported a positive median return of +0.56% for the second quarter.
BNY Mellon Canadian Master Trust Universe Median Plan Returns*
Universe Medians |
2Q |
One-Year |
Three- |
Five- |
Ten-Years |
|
Canadian Master Trust Total Fund |
2.34 |
6.14 |
7.99 |
7.27 |
8.95 |
|
Canadian Equity |
1.95 |
2.42 |
8.65 |
4.90 |
8.58 |
|
U.S. Equity |
1.36 |
7.92 |
14.26 |
14.57 |
16.37 |
|
International Equity |
1.20 |
1.49 |
10.56 |
7.91 |
9.64 |
|
Non-Canadian Equity |
1.41 |
4.21 |
12.05 |
10.92 |
12.56 |
|
Fixed Income |
2.92 |
8.33 |
3.64 |
5.43 |
6.10 |
|
Real Estate |
1.14 |
7.15 |
8.29 |
7.57 |
----- |
|
Canadian Foundations & Endowments |
1.42 |
4.53 |
7.71 |
6.48 |
8.96 |
|
Canadian Universities |
2.03 |
5.06 |
8.17 |
6.93 |
8.85 |
|
*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 a Canadian company exclusively focused on the investment servicing needs of Canadian institutional investors and international institutional investors into Canada. 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's investment servicing solutions for institutions and corporations are provided in close collaboration with our parent companies, and include custody, multicurrency accounting, fund administration, recordkeeping, pension services, exchange-traded fund services, securities lending services, foreign exchange processing and settlement, and treasury services. As at June 30, 2019, CIBC Mellon had more than C$1.9 trillion of assets under administration on behalf of banks, pension funds, investment funds, corporations, governments, insurance companies, foreign insurance trusts, foundations and global financial institutions whose clients invest in Canada. CIBC Mellon is part of the BNY Mellon network, which as at June 30, 2019 had US$35.5 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.
Media Contact
Brent Merriman, Corporate Communications, CIBC Mellon, 416-643-5065,
[email protected]
SOURCE CIBC Mellon
Media Contact: Brent Merriman, Corporate Communications, CIBC Mellon, 416-643-5065, [email protected]
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