Canadian Plan Sponsors Post Negative Median Returns in Q3 2023, According to the BNY Mellon Canadian Asset Strategy View Universe

Canadian plan sponsors experienced a downturn in returns in Q3, breaking a streak of four successive positive quarters

TORONTO, Nov. 2, 2023 /CNW/ - The median return of the BNY Mellon Canadian Asset Strategy View universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was -1.99% for the third quarter of 2023. The one-year median return as of September 30, 2023, was +8.01%, while the median 10-year annualized return was +6.52%.

The BNY Mellon Canadian Asset Strategy View universe results are based on $290.2 billion worth of investment assets in Canadian investment plans, with the average plan size of $3.7 billion. The universe is designed to provide peer comparisons by plan type and size, and it comprises 79 Canadian corporate, public and university pension plans. Additional insight into the plan results is provided by the BNY Mellon's Asset Strategy View sub asset class universes.

"After posting strong performance returns in the first half of the year, the Canadian pension plans stumbled in Q3 due to increased recession fears, a predicted extended period of central bank tightening and an uncertain economic and political environment," said David Cohen, Director of Global Risk Solutions, BNY Mellon. "All traditional asset classes struggled in the third quarter with September being the major catalyst. All equity segments posted negative returns while the rise in yields caused further declines in fixed income. Private asset classes continue to provide some support."

Among traditional asset classes, International Equity posted the highest performance, with a negative quarterly median return of -1.37%. Canadian Fixed Income returns were the lowest, posting a negative quarterly return of -4.94%.

With respect to non-traditional asset classes, Hedge Funds delivered the strongest performance, with a quarterly median return of +4.19%. Private Equity ended the quarter with a median return of 3.16% while Real Estate delivered a positive performance for the quarter returning 0.59%.

Q3 2023 Highlights of the BNY Mellon Canadian Asset Strategy View Universe

• The BNY Mellon Asset Strategy View universe of Canadian pension plans over $1 billion outperformed the median return of the Total Canadian Asset Strategy View Universe in Q3 2023.
• Canadian Public Pension Plans posted a median performance of -1.21% for the third quarter exceeding both Corporate Pension plan and Foundations & Endowments universes.
• All major equity segments posted negative returns in Q3.
• Canadian Equity posted a median return of -2.07% in the third quarter, ahead of the S&P/TSX Composite Index return of -2.20%.
• U.S. Equity posted a quarterly median return of -1.74%, lagging the S&P 500 Index return of -1.17%.
• Global Equity reported a median return of -1.70% in Q3, underperforming the MSCI World Index return of -1.26%.
• International Equity posted a quarterly median return of -1.37%, exceeding the MSCI EAFE Index return of -1.96%
• Emerging Markets Equity posted a negative median performance for the quarter of -1.28%, behind the MSCI Emerging Markets Index return of -0.68%.
• The Canadian Fixed Income median return was -4.94% in the third quarter of 2023. Fixed Income underperformed relative to the FTSE Canada Universe Bond Index for the quarter, which returned -3.87%.
• Private Equity reported a positive quarterly median return of +3.16% for the third quarter, Real Estate reported a quarterly median return of 0.59%. Hedge Funds reported a strong return of 4.19%.

BNY Mellon Canadian Asset Strategy View Universe Median Plan Returns*

Universe Medians	Q3 2023	One-Year	Three-Years	Five-Years	Ten-Years
Canadian Asset Strategy View Total Fund	-1.99	8.01	3.91	4.63	6.52
Canadian Equity	-2.07	10.32	11.93	7.64	8.22
U.S. Equity	-1.74	17.58	10.25	8.91	13.22
International Equity	-1.37	19.32	4.52	4.16	6.79
Global Equity	-1.70	19.43	6.98	7.90	10.67
Canadian Fixed Income	-4.94	-1.40	-4.94	0.34	1.96
Canadian Foundations & Endowments	-1.77	11.60	6.00	5.45	6.88
Canadian Public Pension Plans	-1.21	9.00	5.08	5.52	6.96
Canadian Corporate Pension Plans	-3.44	5.12	1.80	3.93	6.31

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

Media Contact:

Alexandra DeCata, Corporate Communications, CIBC Mellon, 416-643-6126, [email protected]

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 September 30, 2023, CIBC Mellon had more than C$2.4 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 September 30, 2023, had US$45.7 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.

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.

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SOURCE CIBC Mellon

Alexandra DeCata, Corporate Communications, CIBC Mellon, 416-643-6126, [email protected]