Canadian Plan Sponsors Post Positive Median Returns in Q4 2023, According to the BNY Mellon Canadian Asset Strategy View Universe

Canadian plan sponsors close 2023 with a robust positive return, marking strong performance in the last quarter.

TORONTO, Jan. 31, 2024 /CNW/ - The median return of the BNY Mellon Canadian Asset Strategy View universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was 7.27% for the fourth quarter of 2023. The one-year median return as of December 31, 2023, was +10.48%, while the median 10-year annualized return was +6.74%.

The BNY Mellon Canadian Asset Strategy View universe results are based on $291.8 billion worth of investment assets in Canadian investment plans, with the average plan size of $4.1 billion. The universe is designed to provide peer comparisons by plan type and size, and it comprises 72 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 navigating a slight downturn in Q3, the Canadian pension plan returns rebounded in the fourth quarter, showcasing resilient performance," said David Cohen, Director of Global Risk Solutions, BNY Mellon. "This turnaround was fueled by stable global inflation and growing optimism for potential interest rate cuts in 2024. All traditional asset classes delivered high single digit returns in Q4 with both equity and fixed income asset classes propelling the 2023 calendar returns into notably positive territory. There was negative performance in some of the private asset classes as lagged lower valuations caused a small dent on total plan returns."

Among traditional asset classes, Canadian Fixed Income posted the highest performance, with a quarterly median return of 10.04%. International Equity returns were the lowest, posting a quarterly return of 6.65%.

With respect to non-traditional asset classes, Private Equity delivered the strongest performance, with a quarterly median return of +1.45%. Hedge Funds ended the quarter with a median return of -0.30% while Real Estate delivered a negative performance for the quarter returning -2.08%.

Q4 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 underperformed the median return of the Total Canadian Asset Strategy View Universe in Q4 2023.
• Canadian Corporate Pension Plans posted a median performance of 8.13% for the fourth quarter exceeding both Public Pension plan and Foundations & Endowments universes.
• All major equity segments posted positive returns in Q4.
• Canadian Equity posted a median return of 7.69% in the fourth quarter, behind the S&P/TSX Composite Index return of 8.10%.
• U.S. Equity posted a quarterly median return of 8.91%, slightly lagging the S&P 500 Index return of 8.93%.
• Global Equity reported a median return of 8.52% in Q4, underperforming the MSCI World Index return of 8.78%.
• International Equity posted a quarterly median return of 6.65%, lagging the MSCI EAFE Index return of 7.74%
• Emerging Markets Equity posted a positive median performance for the quarter of 5.73%, ahead of the MSCI Emerging Markets Index return of 5.27%.
• The Canadian Fixed Income median return was 10.04% in the fourth quarter of 2023. Fixed Income outperformed relative to the FTSE Canada Universe Bond Index for the quarter, which returned 8.27%.
• Private Equity reported a positive quarterly median return of +1.45% for the fourth quarter, Real Estate reported a quarterly median return of -2.08%. Hedge Funds reported a return of -0.30%.

BNY Mellon Canadian Asset Strategy View Universe Median Plan Returns*

Universe Medians	Q4 2023	One-Year	Three-Years	Five-Years	Ten-Years
Canadian Asset Strategy View Total Fund	7.27	10.48	3.87	6.68	6.74
Canadian Equity	7.69	11.14	11.13	11.62	8.04
U.S. Equity	8.91	17.41	10.75	12.95	12.51
International Equity	6.65	14.48	3.44	7.01	6.44
Global Equity	8.52	18.79	7.03	11.26	10.39
Canadian Fixed Income	10.04	7.97	-2.50	1.73	2.95
Canadian Foundations & Endowments	6.29	12.74	5.41	7.87	7.10
Canadian Public Pension Plans	5.58	9.34	5.01	7.61	6.80
Canadian Corporate Pension Plans	8.13	11.02	2.48	6.21	6.62

*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 December 31, 2023, CIBC Mellon had more than C$2.6 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, 2023, had US$47.8 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.

For more information, including CIBC Mellon's latest knowledge leadership on issues relevant to institutional investors active in Canada, visit www.cibcmellon.com.

SOURCE CIBC Mellon

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