Challenging Q4 means negative returns for Canadian plan sponsors

CIBC Mellon has published the results of its fourth quarter BNY Mellon Canadian Master Trust Universe which highlights a tough fourth quarter in 2018.

Based on $227.1 billion worth of investment assets in Canadian investment plans, it comprises 83 Canadian corporate, public and university pension plans.

For Q4 2018, it shows a median return of -3.21% amid disappointing global market performance. It’s the first quarter of negative returns following 10 consecutive quarters of positive results.

The 2018 median return was -0.35%, while the median 10-year annualized return was +8.68%.

"Financial markets around the globe experienced a difficult fourth quarter, with volatility and negative returns recorded across all equity segments. Canadian investment plans greater than $1 billion in assets under management achieved the highest performance, posting a median return in the fourth quarter of 2018 at -2.85%, and a one-year return of +0.05% for 2018," said Catherine Thrasher, Strategic Client Solutions and Global Risk Solutions, CIBC Mellon and BNY Mellon. "All equity asset classes posted dramatic declines for the quarter, as investors worried about a looming global economic slowdown."

Canadian Foundations and Endowments posted the lowest median return of -4.62% in the fourth quarter of 2018 and -1.49% this past year. Canadian Equity was the poorest performing asset class with a median quarterly return of -9.76%.

BNY Mellon Canadian Master Trust Universe Median Plan Returns*

*All returns are posted gross of fee results, calculated in Canadian dollars.