Canadian Plan Sponsors Post Second Consecutive Quarter of Negative Median Returns in Q2 2022, According to BNY Mellon Canadian Master Trust Universe

Plan returns deteriorate further into negative territory in the first half of 2022

TORONTO, Aug. 3, 2022 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was -7.33% for the second quarter of 2022 amid a challenging economic environment. The one-year median return as of June 30, 2022 was -8.25%, while the median 10-year annualized return was +7.45%. 

The BNY Mellon Canadian Master Trust Universe results are based on $289.7 billion worth of investment assets in Canadian investment plans, with the average plan size of $3.5 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.

"Canadian pension plan sponsor returns were negative for the second consecutive quarter in 2022, amid sustained headwinds including rising inflation and decelerating economic growth as the risks of recession rise globally," said Catherine Thrasher, Head of Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon. "Despite some support from the private asset classes, the BNY Mellon Canadian Master Trust Universe median return was negative in the quarter, including significant underperformance in both equity and fixed income asset classes".

Among traditional asset classes, Fixed Income posted the highest – albeit negative – performance, with a quarterly median return of -6.46%. US Equity returns were the lowest, posting a negative quarterly return of -12.51%.

With respect to non-traditional asset classes, Real Estate delivered the highest performance, with a quarterly median return of +4.37%. Private Equity ended the quarter with a median return of +3.25% while Hedge Funds delivered a positive performance for the quarter returning +1.32%.

Q2 2022 Highlights of the BNY Mellon Canadian Master Trust Universe

• The BNY Mellon Canadian Master Trust Universe of Canadian pension plans over $1 billion outperformed the median return of the Canadian Master Trust Universe in Q2 2022.
• Canadian Foundations and Endowments posted a median performance of -8.06% for the second quarter.
• All major equity segments posted negative returns in Q2.
• Canadian Equity posted a median return of -11.05% in the second quarter, ahead of the S&P/TSX Composite Index return of -13.19%.
• U.S. Equity posted a quarterly median return of -12.51%, exceeding the S&P 500 Index return of -13.35%.
• Non-Canadian Equity reported a median return of -11.96% in Q2, outperforming the MSCI World Index return of -13.30%.
• International Equity posted a quarterly median return of -11.22%, slightly ahead of the MSCI EAFE Index return of -11.49%
• The Fixed Income median return was -6.46% in the second quarter of 2022. Fixed Income underperformed relative to the FTSE Canada Universe Bond Index for the quarter, which returned -5.66%.
• Further insight from the BNY Mellon Asset Allocation Trust Universes indicates that Emerging Markets Equity posted negative median performance for the quarter of -9.25%, behind the MSCI Emerging Markets Index return of -8.43%.
• BNY Mellon Asset Allocation Trust Universes also provide insights regarding alternative asset classes. Private Equity reported a positive quarterly median return of +3.25% for the second quarter and Real Estate reported a quarterly median return of +4.37%. Hedge Funds reported a return of +1.32%.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*

Universe Medians	2Q 2022	One- Year	Three- Years	Five- Years	Ten- Years
Canadian Master Trust Total Fund	-7.33	-8.25	3.44	5.05	7.45
Canadian Equity	-11.05	-4.08	7.60	7.24	9.24
U.S. Equity	-12.51	-10.76	8.22	9.76	15.16
International Equity	-11.22	-17.32	1.33	2.99	9.00
Non-Canadian Equity	-11.96	-12.58	5.31	6.56	11.71
Fixed Income	-6.46	-12.94	-2.65	0.33	2.22
Real Estate	4.37	18.33	8.90	8.52	8.18
Canadian Foundations & Endowments	-8.06	-7.90	4.33	5.29	7.79

*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, 2022, CIBC Mellon had more than C$2.3 trillion in assets under administration. CIBC Mellon is part of the BNY Mellon network, which as at June 30, 2022 had US$43 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.

SOURCE CIBC Mellon

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