Canadian Plan Sponsors Post Positive Median Returns in Q2 of 2020, Led by Strong Gains in Public Markets

Equity and fixed income investments rebound from first quarter declines with positive performance in the second quarter, while alternative investment performance lags behind.

TORONTO, Aug. 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 +9.23% for the second quarter of 2020, marking a reversal in investment returns from the first quarter of 2020. The one-year median return as of June 30, 2020 was +5.10%, while the median 10-year annualized return was +8.57%. 

The BNY Mellon Canadian Master Trust Universe results are based on $255.5 billion worth of investment assets in Canadian investment plans, with the average plan size of $3.04 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.

"Despite ongoing pandemic concerns, public markets rebounded with significant positive returns in the second quarter," said Catherine Thrasher, Head of Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon. "Canadian plan sponsors benefitted with positive performance results, led by equities from all regions."

Among traditional asset classes, the U.S. Equity Universe median posted the highest performance, with a quarterly median return of +15.11% and a one-year return of +6.74%. Fixed Income returns also rebounded, posting positive performance of +7.91% and a one-year return of +9.05%.

With respect to non-traditional asset classes, Private Equity delivered the lowest performance for the quarter, returning -4.84%, reflecting updated valuations from the first quarter. The one-year median return for the Private Equity class was +8.13%. Real Estate ended the quarter with a median return of -2.75% and a one-year median return of +5.67%. Hedge Funds delivered positive performance, with a quarterly median return of +2.49%, compared to -1.47% in the first quarter. The one-year median return for the Hedge Fund class was +6.45%.

Q2 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 79 basis points for Q2 2020.
• Canadian Universities posted the highest performance among plans for the second quarter of 2020, with median performance of +9.85%. Canadian Foundations and Endowments also displayed recovery, with a median return of +9.39%.
• All of the equity segment returns rebounded this quarter and displayed double-digit positive results across the board.
• U.S. Equity median performance of +15.11% trailed the S&P 500 Index result of +15.35%.
• Canadian Equity posted a median return of +14.11%, but ended behind the S&P/TSX Composite Index result of +16.97%.
• Non-Canadian Equity reported a positive median return of +13.50%, however, this asset class underperformed the MSCI World Index return of +14.39%.
• International Equity posted a quarterly median return of +10.89%, ahead of the MSCI EAFE Index return of +10.12%.
• The Fixed Income median return was +7.91% in the second quarter of 2020. Fixed Income outperformed relative to the FTSE Canada Universe Bond Index, which returned +5.87%.
• Further insight from the BNY Mellon Asset Allocation Trust Universes indicates that Emerging Markets Equity posted positive median performance for the quarter of +13.07%, only slightly behind the MSCI Emerging Markets Index return of +13.09%.
• BNY Mellon Asset Allocation Trust Universes also provide insights regarding alternative asset classes. Private Equity reported a negative quarterly median return of -4.84% and Real Estate reported a negative quarterly median return of -2.75%. Hedge Funds reported positive performance, returning +2.49% for the second quarter.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*

Universe Medians	Q2 2020	One- Year	Three- Years	Five- Years	Ten- Years
Canadian Master Trust Total Fund	9.23	5.10	6.11	6.41	8.57
Canadian Equity	14.11	-3.63	2.91	4.18	7.19
U.S. Equity	15.11	6.74	9.55	10.26	16.30
International Equity	10.89	2.06	3.59	5.44	9.80
Non-Canadian Equity	13.50	4.96	6.81	7.86	12.49
Fixed Income	7.91	9.05	5.96	5.25	6.20
Real Estate	-2.75	5.67	7.35	7.06	-----
Canadian Foundations & Endowments	9.39	3.44	5.23	6.10	8.39
Canadian Universities	9.85	3.76	5.85	6.40	8.54

*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 June 30, 2020, CIBC Mellon had more than C$2 trillion in assets under custody and/or administration. CIBC Mellon is part of the BNY Mellon network, which as at June 30, 2020 had US$37.3 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, 416-643-6538, [email protected]

SOURCE CIBC Mellon

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

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