Equity Markets Lead Canadian Plan Sponsors to Post Positive Median Returns in Q4 2020 According to BNY Mellon Canadian Master Trust Universe

Plans ended 2020 with positive 1 year returns despite ongoing global challenges

TORONTO, Feb. 1, 2021 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was +5.55% for the fourth quarter of 2020. The latest results mark an improvement in investment returns from the third quarter and consecutive positive median returns following the strong market rebound experienced in Q2. The year-to-date median return as of December 31, 2020 was +9.96%, while the median 10-year annualized return was +8.32%. 

The BNY Mellon Canadian Master Trust Universe results are based on $291.1 billion worth of investment assets in Canadian investment plans, with the average plan size of $3.3 billion. The Universe is designed to provide peer comparisons by plan type and size, and it comprises 87 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.

"We continued to see positive returns through the end of 2020, despite the tremendous challenges and uncertainty experienced during the year stemming from the COVID-19 pandemic. Canadian plan sponsors posted positive results for the final quarter of the year and for the year-to-date," said Catherine Thrasher, Head of Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon. "Canadian plans have been resilient with higher positive performance results for the fourth quarter compared to last quarter, led again by equities in all major markets."

Among traditional asset classes, the International Equity Universe median posted the highest performance, with a quarterly median return of +10.80% and a one-year return of +10.36%. Fixed Income returns were still positive, posting quarterly performance of +1.02% and a one-year return of +10.81%.

With respect to non-traditional asset classes, Private Equity delivered the highest performance, with a quarterly median return of +1.27%, compared to +3.16% in the third quarter. The year-to-date median return for the Private Equity class was +10.03%. Hedge Funds delivered positive performance for the quarter returning +1.26%. The year-to-date median return for the Hedge Fund class was +7.44%. Real Estate ended the quarter with a median return of +0.39% and a year-to-date median return of +1.75%.

Q4 2020 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 by 28 basis points for Q4 2020 but underperformed the Canadian Master Trust Universe by 31 basis points for the year.
• Canadian Foundations and Endowments posted the highest performance among plans for the fourth quarter of 2020, with median performance of +7.29%. Canadian Universities also displayed positive results, with a median return of +6.44% in Q4.
• All of the major equity segments posted positive returns.
• Canadian Equity posted a median return of +10.01% in the fourth quarter, ahead of the S&P/TSX Composite Index return of +8.97%.
• U.S. Equity posted a quarterly median return of +9.01%, outperforming the S&P 500 Index return of +6.96%.
• Non-Canadian Equity reported a positive median return of +10.01% in Q4, outperforming the MSCI World Index return of +8.80%.
• International Equity was the highest performing asset class and posted a quarterly median return of +10.80%, ahead of the MSCI EAFE Index return of +10.72%.
• The Fixed Income median return was +1.02% in the fourth quarter of 2020, up from the third quarter return of +0.87%. Fixed Income outperformed relative to the FTSE Canada Universe Bond Index for the fourth quarter, which returned +0.63%.
• Further insight from the BNY Mellon Asset Allocation Trust Universes indicates that Emerging Markets Equity posted positive median performance for the quarter of +13.97%, but behind the MSCI Emerging Markets Index return of +14.24%.
• BNY Mellon Asset Allocation Trust Universes also provide insights regarding alternative asset classes. Private Equity reported a positive quarterly median return of +1.27% for the fourth quarter and Hedge Funds reported positive performance of +1.26%. Real Estate reported a quarterly median return of +0.39%.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*

Universe Medians	4Q 2020	One- Year	Three- Years	Five- Years	Ten- Years
Canadian Master Trust Total Fund	5.55	9.96	7.52	7.83	8.32
Canadian Equity	10.01	5.99	5.40	8.80	6.66
U.S. Equity	9.01	14.46	12.75	12.31	16.33
International Equity	10.80	10.36	6.71	7.81	9.62
Non-Canadian Equity	10.01	13.13	9.95	9.95	12.46
Fixed Income	1.02	10.81	6.61	5.13	6.00
Real Estate	0.39	1.75	5.74	6.29	-----
Canadian Foundations & Endowments	7.29	8.87	7.54	8.41	8.47
Canadian Universities	6.44	9.99	7.08	8.07	8.32

*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 December 31, 2020, CIBC Mellon had more than C$2.1 trillion in assets under administration. CIBC Mellon is part of the BNY Mellon network, which as at December 31, 2020 had US$41.1 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

Brent Merriman, Corporate Communications, CIBC Mellon, 416-643-5065, [email protected]

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