Canadian defined benefit pension plans posted a median 3.13 per cent return for the third quarter of 2020, following a strong market rebound, according to a new report by BNY Mellon Asset Management Canada Ltd.
The organization’s master trust universe, which is comprised of 86 Canadian corporate, public and university pension plans, found U.S. equities was the highest-performing asset class with a median return of 6.46 per cent, trailing the S&P 500 index’s 6.83 per cent. And Canadian equities posted a median return of 5.27 per cent, ahead of the S&P/TSX composite index’s 4.73 per cent.
In addition, non-Canadian equities posted a 5.65 per cent return, slightly under the MSCI world index return of 5.96 per cent, while international equity’s five per cent return was ahead of the MSCI EAFE index return of 2.86 per cent. Emerging markets equity posted a 7.39 per cent gain, slightly less than the MSCI emerging markets index’s 7.59 per cent result.
Fixed income’s 0.87 per cent median return was down significantly from the 7.91 per cent gain posted in the second quarter, but outperformed the 0.44 per cent return posted by the FTSE Canada universe bond index.
And alternative investments, including private equity, hedge funds and real estate, posted returns of 3.16 per cent, 1.48 per cent and negative 0.2 per cent, respectively.