Canadian Plan Sponsors Post Positive Median Returns in Q1 2023, According to the BNY Mellon Canadian Asset Strategy View Universe

Canadian plan sponsors kick-off 2023 on an optimistic note with a positive Q1 return.

TORONTO, May 2, 2023 /CNW/ - The median return of the BNY Mellon Canadian Asset Strategy View universe, a BNY Mellon Global Risk Solutions fund-level tracking service, was 4.23% for the first quarter of 2023. The one-year median return as of March 31, 2023, was 0.98%, while the median 10-year annualized return was +7.52%.

The BNY Mellon Canadian Asset Strategy View universe results are based on $302.3 billion worth of investment assets in Canadian investment plans, with the average plan size of $3.6 billion. The universe is designed to provide peer comparisons by plan type and size, and it comprises 84 Canadian corporate, public and university pension plans. Additional insight into the plan results is provided by the BNY Mellon's Asset Strategy View sub asset class universes.

"Despite some improvements with headline inflation easing globally, and encouraging economic data, the geopolitical backdrop remains challenging due to increased tensions between the U.S. and China, and uncertainty in the financial sector that started with the collapse of Silicon Valley Bank," said David Cohen, Director, Global Risk Solutions, BNY Mellon. "Canadian pension plan sponsors posted healthy returns in Q1 with positive contributions from all major asset classes, both public and private. Equities benefited from a global equity rally, while a drop in bond yields boosted fixed income securities."

Among traditional asset classes, Global Equity posted the highest performance, with a quarterly median return of 7.32%. Canadian Fixed Income returns were the lowest, posting a quarterly return of 3.46%.

With respect to non-traditional asset classes, Private Equity delivered the highest performance, with a quarterly median return of +2.02%. Hedge Funds ended the quarter with a median return of +1.19% while Real Estate delivered a negative performance for the quarter returning -0.15%.

• The BNY Mellon Asset Strategy View universe of Canadian pension plans over $1 billion underperformed the median return of the Total Canadian Asset Strategy View Universe in Q1 2023.
• Canadian Foundations and Endowments posted a median performance of 4.56% for the first quarter exceeding both Corporate and Public Pension plans.
• All major equity segments posted positive returns in Q1.
• Canadian Equity posted a median return of 4.24% in the first quarter, behind the S&P/TSX Composite Index return of 4.55%.
• U.S. Equity posted a quarterly median return of 5.75%, lagging the S&P 500 Index return of 7.37%.
• Global Equity reported a median return of 7.32% in Q1, underperforming the MSCI World Index return of 7.75%.
• International Equity posted a quarterly median return of 6.61%, lagging the MSCI EAFE Index return of 8.50%
• The Canadian Fixed Income median return was 3.46% in the first quarter of 2023. Fixed Income outperformed relative to the FTSE Canada Universe Bond Index for the quarter, which returned 3.22%.
• Emerging Markets Equity posted a positive median performance for the quarter of 4.86%, ahead of the MSCI Emerging Markets Index return of 3.89%.
• Private Equity reported a positive quarterly median return of 2.02% for the first quarter, Real Estate reported a quarterly median return of -0.15%. Hedge Funds reported a return of +1.19%.

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 December 31, 2022, CIBC Mellon had more than C$2.4 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 December 31, 2022, had US$44.3 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.

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.

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:

Alexandra DeCata, Corporate Communications, CIBC Mellon, 416-643-6126, [email protected]

SOURCE CIBC Mellon