Canadian Plan Sponsors Post Negative Median Returns Amid Financial Downturn

Equities suffer negative performance in the first quarter due to the global pandemic and market volatility. 

TORONTO, May 4, 2020 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was -7.23% for the first quarter of 2020 as COVID-19 became a global pandemic. The one-year median return as of March 31, 2020 was -1.13%, while the median 10-year annualized return was +7.24%. 

The BNY Mellon Canadian Master Trust Universe results are based on $233.6 billion worth of investment assets in Canadian investment plans, with the average plan size of $2.78 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 experienced significant losses during the first quarter, marked by severe price declines and increased volatility in response to the COVID-19 pandemic and the ongoing OPEC dispute. With unprecedented market losses experienced during the first three months of the year and a worldwide economic decline, all equity asset class performance was in negative territory," said Catherine Thrasher, Head of Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon.

Among traditional asset classes, the Canadian Equity Universe median posted the lowest performance, with a quarterly median return of -20.10% and a one-year return of -14.03%. Fixed Income returns posted a slightly negative performance of -0.13%.

Among non-traditional asset classes, Private Equity delivered the highest performance for the quarter, returning +9.64%, albeit on lagged valuations. The one-year median return for the Private Equity asset class was +14.23%. Real Estate ended the quarter with a median return of +3.30% and a one-year median return of +9.25%. Hedge Funds delivered a quarterly median return of -1.47%, compared to +0.04% in the fourth quarter. The one-year median return for the Hedge Fund asset class was +3.24%.

Q1 2020 Highlights of the BNY Mellon Canadian Master Trust Universe

• The BNY Mellon Canadian Master Trust Universe outperformed the median returns of Canadian pension plans over $1 billion by 39 basis points for Q1 2020.
• Canadian Foundations and Endowments posted the lowest performance among plans for the first quarter of 2020, with median performance of -10.70%. Canadian Universities were further ahead but still negative, with a median return of -8.60%.
• All of the equity segment returns were hard hit this quarter and displayed negative results across the board.
• Canadian Equity performance was the lowest asset class universe median return for the quarter, with a median return of -20.10%, but slightly ahead of the S&P/TSX Composite Index result of -20.90%. 
• U.S. Equity median performance of -13.50% trailed the S&P 500 Index result of -11.75%.
• International Equity posted a quarterly median return at -15.35%, behind the MSCI EAFE Index return of -15.17%.
• Non-Canadian Equity performance was also negative, with a median return of -14.66%, underperforming the MSCI World Index return of -13.21%.
• The Fixed Income median return was -0.13% in the first quarter of 2020. Fixed Income underperformed relative to the FTSE Canada Bond Universe Index, which returned +1.56%.
• Further insight from the BNY Mellon Asset Allocation Trust Universes indicates that Emerging Markets Equity posted negative median performance for the quarter of -16.74% and underperformed the MSCI Emerging Markets Index return of -16.11%.
• BNY Mellon Asset Allocation Trust Universes also provide insights regarding alternative asset classes. Private Equity reported a positive median return of +9.64%. Real Estate reported a positive median return of +3.30%, followed by Hedge Funds, returning -1.47% for the first quarter.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*

Universe Medians	1Q 2020	One- Year	Three- Years	Five- Years	Ten- Years
Canadian Master Trust Total Fund	-7.23	-1.13	3.88	4.25	7.24
Canadian Equity	-20.10	-14.03	-1.86	1.23	4.95
U.S. Equity	-13.50	-3.99	4.99	6.84	13.65
International Equity	-15.35	-7.96	1.65	3.24	7.63
Non-Canadian Equity	-14.66	-6.64	3.36	5.15	10.26
Fixed Income	-0.13	4.09	4.01	3.05	5.59
Real Estate	3.30	9.25	9.54	8.35	-----
Canadian Foundations & Endowments	-10.70	-4.54	2.51	3.80	7.19
Canadian Universities	-8.60	-2.06	3.18	4.07	7.06

*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 March 31, 2020, CIBC Mellon had more than C$1.8 trillion in assets under custody and/or administration. CIBC Mellon is part of the BNY Mellon network, which as at March 31, 2020 had US$35.2 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:
Jennifer Israel, Corporate Communications, CIBC Mellon, 647-823-8417, [email protected] 

SOURCE CIBC Mellon

Media Contact: Jennifer Israel, Corporate Communications, CIBC Mellon, 647-823-8417, [email protected]

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