Second Quarter Canadian Plan Sponsor Returns Stay Positive Despite Negative Canadian Equity Returns, According to BNY Mellon Canadian Master Trust Universe

Fifth straight quarter in the black for BNY Mellon Canadian Master Trust Universe; one-year gain of 9.62% tops 10-year average return

TORONTO, Aug. 1, 2017 /CNW/ - The median return of the BNY Mellon Canadian Master Trust Universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was +1.53% for the second quarter of 2017, marking the fifth straight quarter of positive results. The one-year return of +9.62% was above the Canadian Master Trust Universe's 10-year annualized return of +6.08% and also marks the fifth consecutive quarter of positive one-year performance.

With a market value of more than $234.1 billion and an average plan size of $2.6 billion, the BNY Mellon Canadian Master Trust Universe is a fund-level tracking service that can be used to make peer comparisons of performance by plan type and size. It consists of 90 Canadian corporate, public and university pension plans. Additional insight of the Canadian Master Trust Universe data is provided by BNY Mellon's big data product, Asset Strategy View, and the Universe product extension, Asset Allocation Trust Universe. "The detailed sub-asset class information offered in the BNY Mellon Canadian Master Trust Universe can be of value to Canadian pension plans and university endowments, as well as investment boards, in identifying macro allocation trends and helping to make informed decisions," said Tim Rourke, Vice President, Segment Lead, Pensions and Asset Owners, CIBC Mellon.

"The Canadian plans remained positive in the second quarter of 2017 with 96% of the plans posting positive results and a median return for the quarter of +1.53% and a 2017 year-to-date median return of +4.74%. The Canadian pension plans posted the best median return for the second quarter (+1.53%), followed closely by Canadian Universities' median return of +1.43%," said Catherine Thrasher, Managing Director, Global Risk Solutions Canada, BNY Mellon Asset Servicing. "Both plan types benefitted from higher allocations to outperforming international equities, the top performing asset class for the second quarter with a median return of +3.71%. International equity was the best performing asset class over the one year time horizon (+21.01%)."

Q2 Highlights of the BNY Mellon Canadian Master Trust Universe

  • 96% of plans posted positive results during the quarter; median returns for plans over $1 billion underperformed the median of the BNY Mellon Canadian Master Trust Universe by eight basis points for Q2 2017.
  • Canadian pension plans posted the highest median return for the second quarter +1.53% just edging out Canadian Universities with a median return of +1.43%.
  • Canadian equity posted a quarterly median return of -1.31%, versus the S&P/TSX Composite Index return of -1.64%. U.S. equity's median quarterly return of +0.66% outperformed as compared to the S&P 500 Index result of +0.39%. International equity and non-Canadian equity, with median returns of +3.71% and +2.65%, reported higher results versus the MSCI EAFE Index and MSCI World Index returns of +3.58% and +1.48%, respectively.
  • Further insight on international equities from the BNY Mellon Asset Allocation Trust Universes indicate non-North-American equity posted the highest median results for the quarter, +3.77%, surpassing the MSCI EAFE Index by 19 basis points. Median returns from Canadian large cap equity (-1.73%) and hedge funds (-2.02%) were underperformers for the second quarter.
  • 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, reporting a median return of +2.02%, followed by infrastructure +1.85%, real estate +1.72%, and hedge funds -2.02% in the second quarter, as reported by the Asset Allocation Trust Universes.

 

BNY Mellon Canadian Master Trust Universe Median Plan Returns*













Universe Medians

2Q
2017
%

One-
Year
%

Three-
Years
%

Five-
Years
%

Ten-
Years
%







Canadian Master Trust Total Fund

1.53

9.62

7.39

10.24

6.08


Canadian Equity

-1.31

12.97

4.00

11.04

4.65


U.S. Equity

0.66

19.35

16.27

21.00

9.38


International Equity

3.71

21.01

9.60

14.86

4.24


Non-Canadian Equity

2.65

20.49

12.72

17.67

6.53


Fixed Income

1.64

0.63

5.36

4.31

6.24


Real Estate

1.72

7.04

5.84

8.02

0.00

Canadian Foundations & Endowments

0.73

11.82

7.39

10.41

6.12

Canadian Universities

1.43

11.66

7.21

10.74

6.26


*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, exchange-traded fund services, pension services, securities lending services, foreign exchange processing and settlement, and treasury services. As at June 30, 2017, CIBC Mellon had more than C$1.8 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 network, which as at June 30, 2017 had US$31.1 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

For further information: Jennifer Israel, Corporate Communications, CIBC Mellon, 416-643-6538, jennifer.israel@cibcmellon.com

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