BNY Mellon report: Canadian pension plans maintain positive trajectory in Q2 2023 performance

Canadian Asset Strategy View universe reveals performance amid global uncertainty

BNY Mellon report: Canadian pension plans maintain positive trajectory in Q2 2023 performance

The BNY Mellon Canadian Asset Strategy View universe, a tracking service by BNY Mellon Global Risk Solutions, revealed a median return of +1.19% during the second quarter of 2023. Data as of June 30, indicates a one-year median return of +10.05%, with a 10-year annualized median return of +7.33%.

The report, which analyzes $300.1 billion in Canadian investment assets across various plans, underscores its focus on peer comparisons by plan type and size. Comprising 78 Canadian corporate, public, and university pension plans, the universe provides valuable insights, further enhanced by BNY Mellon's Asset Strategy View sub asset class universes.

"During a time of ongoing global uncertainty, Canadian pension plans remain strong and resilient, achieving positive returns in Q2," said David Cohen, director of global risk solutions at BNY Mellon.

"Major equity segments contributed significantly to this success, though Canadian fixed income and some private asset classes faced challenges during the same period."

In terms of traditional asset classes, U.S. equity stands out with a quarterly median return of +3.75%. Meanwhile, Canadian fixed income exhibits the lowest performance, with a negative quarterly return of -0.09%.

Turning to non-traditional asset classes, private equity delivered the highest performance, achieving a quarterly median return of +0.17%. In contrast, Hedge Funds conclude the quarter with a median return of -0.28%, while Real Estate faces a negative quarterly performance, returning -0.82%.

Other key highlights from the Q2 2023 BNY Mellon Canadian Asset Strategy View Universe report include:

  • Pension plans within the BNY Mellon Asset Strategy View universe, managing over $1 billion, demonstrated performance slightly below the median return of the Total Canadian Asset Strategy View Universe.
  • Canadian Foundations and Endowments outperformed Corporate and Public Pension plan universes, achieving a median performance of +1.41% in the second quarter.
  • Most major equity segments exhibited positive returns in Q2.
  • Emerging markets equity, despite a negative median performance of -0.27%, outperformed the MSCI Emerging Markets Index return of -1.21%.
  • Canadian Fixed Income reported a second-quarter median return of -0.09%, outperforming the FTSE Canada Universe Bond Index, which posted a return of -0.69%.
  • Private equity displayed a positive quarterly median return of +0.17%, while Real Estate reported a median return of -0.82%. Hedge Funds reported a return of -0.28%.