Canadian DB plans post positive returns in last quarter of 2017

Canadian defined benefit plans posted a median return of 4.29 per cent in the last quarter of 2017, a marked improvement compared to the median return of 0.55 per cent in the third quarter of the year, according to a report by BNY Mellon Asset Management Canada Ltd.

The firm’s tracking service, which consists of 88 Canadian corporate, public and university pension plans, showed a one-year median return of 9.83 per cent in its latest report. It found Canadian university plans had the highest median returns (4.22 per cent) in the fourth quarter, followed closely by foundations and endowments (4.11 per cent).

Within these plan’s portfolios, U.S. equity was the top performing asset class in the fourth quarter, with a median return of 6.65 per cent, said Catherine Thrasher, managing director of global risk solutions for Canada at BNY Mellon, in a news release.

International equity returned 5.45 per cent, while emerging markets equity posted 7.03 per cent for the quarter. Fixed income produced a median return of 2.98 per cent in the fourth quarter.

Within the funds’ alternative assets, private equity outperformed with a median return of 4.42 per cent, followed by infrastructure (3.04 per cent) and real estate (2.39 per cent). Hedge funds lagged with a median return of 2.2 per cent.

Source: Benefits Canada