Canadian Plan Sponsors Post Positive Median Returns in Q4 2022, According to BNY Mellon Canadian Master Trust Universe

A strong fourth quarter helps plan sponsors reduce the large underperformance of 2022

TORONTO, Feb. 1, 2023 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was 4.27% for the fourth quarter of 2022 despite the continuously challenging macro-environment. The one-year median return as of December 31, 2022, was -7.48%, while the median 10-year annualized return was +7.30%.

The BNY Mellon Canadian Master Trust Universe results are based on $290.3 billion worth of investment assets in Canadian investment plans, with the average plan size of $3.8 billion. The Universe is designed to provide peer comparisons by plan type and size, and it comprises 77 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.

"The world continues to face tough economic conditions and elevated risks, including geopolitical uncertainty and ongoing inflation. We nonetheless saw some positive developments towards the end of 2022, such as the relaxation of China's zero-Covid policy and the slowing of interest rate increases." said David Cohen, Director, Global Risk Solutions, BNY Mellon. "Positive performance in October and November helped Canadian pension plan sponsors offset some of the underperformance from the first half of the year. Private asset classes continued to provide strong support, while Fixed Income was a clear detractor as interest rates rose through 2022."

Among traditional asset classes, International Equity posted the highest performance, with a quarterly median return of 13.38%. Fixed Income returns were the lowest, posting a flat quarterly return of 0.43%.

With respect to non-traditional asset classes, Private Equity delivered the highest performance, with a quarterly median return of +2.10%. Hedge Funds ended the quarter with a median return of +1.74% while Real Estate delivered a flat performance for the quarter returning -0.19%.

Q4 2022 Highlights of the BNY Mellon Canadian Master Trust Universe

• The BNY Mellon Canadian Master Trust Universe of Canadian pension plans over $1 billion underperformed the median return of the Canadian Master Trust Universe in Q4 2022.
• Canadian Foundations and Endowments posted a median performance of 5.63% for the fourth quarter.
• All major equity segments posted positive returns in Q4.
• Canadian Equity posted a median return of 6.71% in the fourth quarter, ahead of the S&P/TSX Composite Index return of 5.96%.
• U.S. Equity posted a quarterly median return of 6.88%, exceeding the S&P 500 Index return of 6.07%.
• Non-Canadian Equity reported a median return of 9.76% in Q4, outperforming the MSCI World Index return of 8.36%.
• International Equity posted a quarterly median return of 13.38%, lagging the MSCI EAFE Index return of 15.77%
• The Fixed Income median return was 0.43% in the fourth quarter of 2022. Fixed Income outperformed relative to the FTSE Canada Universe Bond Index for the quarter, which returned 0.10%.
• Further insight from the BNY Mellon Asset Allocation Trust Universes indicates that Emerging Markets Equity posted a positive median performance for the quarter of 8.54%, ahead of the MSCI Emerging Markets Index return of 8.27%.
• BNY Mellon Asset Allocation Trust Universes also provide insights regarding alternative asset classes. Private Equity reported a positive quarterly median return of 2.10% for the third quarter, Real Estate reported a quarterly median return of -0.19%. Hedge Funds reported a return of +1.74%.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*

Universe Medians	4Q 2022	One-Year	Three-Years	Five-Years	Ten-Years
Canadian Master Trust Total Fund	4.27	-7.48	3.33	4.76	7.30
Canadian Equity	6.71	-4.89	7.46	6.54	8.91
U.S. Equity	6.88	-11.26	7.80	9.99	15.62
International Equity	13.38	-11.92	2.73	3.85	9.01
Non-Canadian Equity	9.76	-11.35	5.57	6.85	11.90
Fixed Income	0.43	-11.46	-2.54	0.61	2.17
Real Estate	-0.19	10.63	8.47	8.39	7.61
Canadian Foundations & Endowments	5.63	-6.91	4.29	5.41	7.49

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

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, 2022, CIBC Mellon had more than C$2.3 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, 2022, had US$42.2 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.

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.

Media Contact:

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

SOURCE CIBC Mellon