Canadian Plan Sponsors Post Negative Median Returns Following a Challenging Quarter of Global Market Performance

The BNY Mellon Canadian Master Trust Universe results have been released for the fourth quarter of 2018

TORONTO, Feb. 5, 2019 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was -3.21% for the fourth quarter of 2018, amid disappointing global market performance. This marks the first quarter of negative returns following 10 consecutive quarters of positive results. The 2018 median return was -0.35%, while the median 10-year annualized return was +8.68%.

The BNY Mellon Canadian Master Trust Universe results are based on $227.1 billion worth of investment assets in Canadian investment plans, with the average plan size of $2.7 billion. The Universe is designed to provide peer comparisons by plan type and size, and it comprises 83 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.

"Financial markets around the globe experienced a difficult fourth quarter, with volatility and negative returns recorded across all equity segments. Canadian investment plans greater than $1 billion in assets under management achieved the highest performance, posting a median return in the fourth quarter of 2018 at -2.85%, and a one-year return of +0.05% for 2018," said Catherine Thrasher, Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon. "All equity asset classes posted dramatic declines for the quarter, as investors worried about a looming global economic slowdown."

Canadian Foundations and Endowments posted the lowest median return of -4.62% in the fourth quarter of 2018 and -1.49% this past year. Canadian Equity was the poorest performing asset class with a median quarterly return of -9.76%. U.S. Equity median returns followed, returning -8.54%. International and Non-Canadian Equity median returns were -6.78% and -7.50%, respectively. Amid overwhelming economic uncertainty, the Canadian Fixed Income market achieved positive results during the final quarter of 2018. Fixed Income median performance was positive, with a return of +1.62% in the fourth quarter of 2018 and a one-year return of +1.19% for 2018.

Q4 2018 Highlights of the BNY Mellon Canadian Master Trust Universe

• Median returns for Canadian plans over $1 billion outperformed the median return of the BNY Mellon Canadian Master Trust Universe by 36 basis points for Q4 2018.
• Canadian Foundations and Endowments trailed among plans for the fourth quarter of 2018, posting negative median performance of -4.62%. Canadian Universities were ahead slightly, with a less negative return of -4.15%.
• Equity segment returns were poor this quarter, displaying negative performance across the board. Canadian Equity posted the lowest quarterly median return of -9.76%, but ended ahead of the S&P/TSX Composite Index return of -10.11%. The U.S. Equity median quarterly return was -8.54%, only slightly ahead of the S&P 500 Index result of -8.62%. International Equity and Non-Canadian Equity also performed poorly, with respective median corresponding returns of -6.78% and -7.50%. However, these results finished ahead of the MSCI EAFE Index and MSCI World Index returns of -7.54% and -8.40% respectively.
• Further insight from the BNY Mellon Asset Allocation Trust Universes indicate that Emerging Markets Equity posted a negative median return for the quarter of -1.54%, while outperforming the MSCI Emerging Markets Index return of -2.15%.
• The Fixed Income median return was +1.62% in the fourth quarter of 2018, and this is the only asset class to achieve positive performance. Fixed Income underperformed relative to the FTSE TMX Canada Bond Universe Index, which returned +1.77%.
• BNY Mellon Asset Allocation Trust Universes also provides insight regarding alternative asset classes. Private Equity reported a high median return of +7.25%, followed by Real Estate at +2.96%, and Hedge Funds at -0.04% for the last quarter.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*

Universe Medians	4Q 2018	One- Year	Three- Years	Five- Years	Ten- Years
Canadian Master Trust Total Fund	-3.21	-0.35	5.23	6.92	8.68
Canadian Equity	-9.76	-7.54	6.57	4.82	8.74
U.S. Equity	-8.54	2.94	8.55	13.10	14.56
International Equity	-6.78	-5.43	4.40	7.45	8.89
Non-Canadian Equity	-7.50	-1.46	6.57	10.05	11.65
Fixed Income	1.62	1.19	2.68	4.85	5.41
Real Estate	2.96	9.50	7.98	7.92	-----
Canadian Foundations & Endowments	-4.62	-1.49	5.69	6.34	8.77
Canadian Universities	-4.15	-0.55	5.84	6.65	8.73

*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 December 31, 2018, CIBC Mellon had more than C$1.8 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 December 31, 2018 had US$33.1 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, Media Relations and Corporate Communications, CIBC Mellon, 416-643-6538, [email protected] 

SOURCE CIBC Mellon

Media Contact: Jennifer Israel, Media Relations and Corporate Communications, CIBC Mellon, 416-643-6538, [email protected]

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