Pandemic Blots One Year’s Worth of Gains from Canadian Plans

Corporate, public, and university funds lost a median 7.23% in the first quarter from falling equities, BNY Mellon says.

The coronavirus pandemic has wiped about a year’s worth of gains from Canadian pension plans, BNY Mellon said Monday. 

Corporate, public, and university retirement funds lost a median 7.23% in the first quarter ending in March, according to the financial services firm. Over the past 12 months, marked by strong advances up until 2020, that represented a 1.13% loss.

But pensions overall still gained about 7.24% annually over the past decade.

Results from the report were drawn from 84 Canadian pension plans, which together hold about $233.6 billion in assets. On average, a typical fund has $2.78 billion.  

The blot in fund performance was driven largely by plummeting equities in March, when markets around the world panicked from the coronavirus outbreak, as well as the Saudi-Russia oil dispute. 

All equity asset classes were negative, according to Catherine Thrasher, head of strategic client solutions and global risk solutions at CIBC Mellon and BNY Mellon. Canadian equities lost 20.1%, just edging ahead of the S&P/TSX Composite Index performance loss of 20.9%. 

Other asset classes dipped into negative territory, including fixed income, which dropped 0.13%. Hedge funds lost roughly 1.5%. 

Some alternative asset classes offset losses for the Canadian pension plans. In the first quarter, private equity returned a median of nearly 10% for the plans. Real estate posted returns just above 3%.  

Even breaking down returns by type of plan revealed laggards. By median, Canadian endowments and foundations posted the lowest performance among plans for the first quarter, logging losses of roughly 11%. Meanwhile, Canadian universities returned a median loss of roughly 9%. 

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