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Canadian Plan Sponsors Post Positive Median Returns Amid a Rebounding Global Market

May 07, 2019

Traditional assets outperformed alternative assets – hedge funds, real estate and private equity – for the quarter. 

TORONTO, May 7, 2019 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was +7.02% for the first quarter of 2019, after ending 2018 with negative global market performance. The 1 year median return as of March 31, 2019 was +6.30%, while the median 10-year annualized return was +9.77%.

The BNY Mellon Canadian Master Trust Universe results are based on $226.5 billion worth of investment assets in Canadian investment plans, with the average plan size of $2.7 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.

"Financial markets around the globe experienced a recovery during the first quarter after last quarter's sharp declines, with positive returns recorded across all equity segments. Canadian Foundations and Endowments achieved the highest performance, posting a median return in the first quarter of 2019 of +7.54%, and a one-year return of +5.79%," said Catherine Thrasher, Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon. "All equity asset classes posted positive results for the quarter, signifying regained confidence over the 2018 global market volatility".

U.S. Equity delivered the highest asset class performance, with a median return of +11.08%. Canadian equity performance also rebounded, with a positive quarterly median return of +10.74%. International and Non-Canadian Equity median returns were behind the North American equities market but were still positive, at +8.66% and +9.95% respectively. The Canadian Fixed Income market continued to achieve positive results during the first quarter of 2019. Fixed Income median performance was also higher than the previous quarter, at +4.63% and with a one-year return of +5.97%.

Q1 2019 Highlights of the BNY Mellon Canadian Master Trust Universe

  • Median returns of the BNY Mellon Canadian Master Trust Universe outperformed Canadian plans over $1 billion by 10 basis points for Q1 2019.
  • Canadian Universities trailed among plans for the first quarter of 2019, posting positive median performance of +6.79%. Canadian Foundations and Endowments were further ahead, with a higher positive return of +7.54%.
  • Equity segment returns recovered this quarter as compared to the last quarter of 2018, displaying positive performance across the board. US Equity posted the highest quarterly median return of +11.08%, but ended slightly behind the S&P 500 Index result of +11.16%. Canadian Equity posted quarterly median performance of +10.74%, but this was also well behind the S&P/TSX Composite Index return of +13.29%. International Equity and Non-Canadian Equity also achieved positive results, with respective median corresponding returns of +8.66% and +9.95%. These results finished ahead of the MSCI EAFE Index return of +7.72% but behind the MSCI World Index return of +10.18%.
  • Further insight from the BNY Mellon Asset Allocation Trust Universes indicate that Emerging Markets Equity posted a positive median return for the quarter of +7.70%, outperforming the MSCI Emerging Markets Index return of +7.55%.
  • The Fixed Income median return was +4.63% in the first quarter of 2019. Fixed Income outperformed relative to the FTSE Canada Bond Universe Index, which returned +3.91%.
  • BNY Mellon Asset Allocation Trust Universes also provides insight regarding alternative asset classes. Hedge Funds reported a positive median return of +1.78% for the first quarter, followed by Real Estate at +1.20%. Private Equity reported a negative median return of -0.78%.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*







Universe Medians

1Q
2019

One-
Year

Three-
Years

Five-
Years

Ten-
Years







Canadian Master Trust Total Fund

7.02

6.30

8.04

7.33

9.77

Canadian Equity

10.74

5.99

9.01

5.83

10.27

U.S. Equity

11.08

11.67

14.43

14.07

17.02

International Equity

8.66

0.09

10.08

8.07

11.01

Non-Canadian Equity

9.95

5.11

11.87

10.90

13.74

Fixed Income

4.63

5.97

3.69

5.26

5.90

Real Estate

1.20

8.23

8.43

7.78

-----

Canadian Foundations & Endowments

7.54

5.79

8.24

6.89

9.89

Canadian Universities

6.79

5.78

8.40

7.01

9.74


*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 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 March 31, 2019, CIBC Mellon had more than C$1.9 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 global network, which as at March 31, 2019 had US$34.5 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.

Media Contact:

Brent Merriman, Corporate Communications, CIBC Mellon, 416-643-5065, brent.merriman@cibcmellon.com

SOURCE CIBC Mellon