Canadian Pension Returns Positive Despite Negative Equity Returns

Tracking service has reported five consecutive quarters of positive results.

The BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions tracking service, reported a median return of 9.62% for the year, and 1.53% for Q2 of 2017, marking the fifth-consecutive quarter of positive results.

The BNY Mellon Canadian Master Trust Universe is a fund-level tracking service that consists of 90 Canadian corporate, public, and university pension plans, and has a market value of more than C$234.1 billion ($186 billion), with an average plan size of C$2.6 billion.

The tracking service’s three-, five- and 10-year returns were 7.39%, 10.24%, and 6.08% respectively.

“The Canadian plans remained positive in the second quarter of 2017 with 96% of the plans posting positive results,” said Catherine Thrasher, managing director, global risk solutions Canada, BNY Mellon Asset Servicing. She added that pension plans and Canadian Universities “benefitted from higher allocations to outperforming international equities, the top-performing asset class for the second quarter.”

The Q2 results were down from the previous quarter, when the Canadian Master Trust Universe reported a return of 3.11% for the quarter, and a one-year return of 11.22%. During Q1, 100% of the plans reported positive results.

Additional Q2 highlights of the BNY Mellon Canadian Master Trust Universe include:

  • Fixed Income performance was positive during the second quarter with a median return of 1.64%, versus the FTSE TMX Canada Bond Universe Index return of 1.11%.
  • Alternative asset classes were led by private equity, which reported a median return of 2.02%, followed by infrastructure 1.85%, real estate 1.72%, and hedge funds -2.02%, as reported by the Asset Allocation Trust Universes.
  • Canadian equity posted a quarterly median return of -1.31%, versus the S&P/TSX Composite Index return of -1.64%. US equity’s median quarterly return of 0.66% outperformed the S&P 500 Index result of +0.39%. 


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