A third-quarter reversal for pension funds in 2020
According to the report, in the third quarter of 2020, diversified pooled fund managers posted a median return of 4.4 per cent before management fees and 2.6 per cent since the beginning of the year.
"The stock market rebound continued into the third quarter, most market indices showed positive returns. The MSCI World Index delivered a 5.9 per cent return for the third quarter. During the third quarter, the bond market posted a positive return of 0.4 per cent, the Canadian Equity S&P/TSX Composite Index posted a return of 4.7 per cent and the
"The good returns obtained in the third quarter enabled pension funds to improve their financial position. However, the financial situation of the pension funds remained worse than it was at the start of the year due to the significant drop in interest rates. This drop in interest rates has caused solvency liabilities to rise significantly since the beginning of the year. We estimate that the solvency ratio of an average pension fund has fallen by around 1.0 per cent to 5.0 per cent since the beginning of the year," added Bergeron.
During the third quarter of 2020, diversified pooled fund managers obtained a median return of 4.4 per cent, which was 1.4 per cent higher than the benchmark portfolio (with an allocation of 55 per cent in equity and 45 per cent in fixed income) used by many pension funds.
Canadian bonds
In the third quarter of 2020, managers obtained a median return of positive 0.9 per cent on bonds (Universe mandate); the return was 0.5 per cent higher than the benchmark index.
During the third quarter of 2020, short-term, mid-term and long-term bond indices posted returns of 0.7 per cent, 1.1 per cent and negative 0.3 per cent respectively. The high-yield bond index posted a return of 4.6 per cent, while the real return bond index provided a 4.4 per cent return.
Canadian equities
In the third quarter of 2020, the median return for Canadian equity managers was 5.9 per cent, which was 1.2 per cent higher than the 4.7 per cent posted by the S&P/TSX Index.
During the third quarter of 2020, the S&P/TSX Small Cap Index gained 6.6 per cent, whereas the S&P/TSX Completion Index representing mid-cap stocks registered an increase of 6.1 per cent, and the large-cap S&P/TSX 60 Index grew by 4.4 per cent.
Foreign equities
Foreign equity managers' median returns and appropriate benchmark indices' returns for the third quarter of 2020 are as follows:
- 6.6 per cent for
U.S. equities versus 6.6 per cent for the S&P 500 Index (C$); - 4.9 per cent for international equities versus 2.8 per cent for the MSCI EAFE Index (C$);
- 5.3 per cent for global equities versus 5.9 per cent for the MSCI World Index (C$);
- 8.4 per cent for emerging market equities versus 7.6 per cent for the MSCI Emerging Markets Index (C$).
Alternative investments
The Dow Jones
The Performance Universe covers about 308 funds managed by nearly 47 investment management firms.
The results of
The
About
Summary | ||||||||||||||
Rates of return for periods ending | ||||||||||||||
Diversified | ||||||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | |||||||
5th percentile | 7.75 | 21.42 | 9.43 | 12.84 | 9.61 | 9.44 | 9.30 | 9.46 | ||||||
1st quartile | 4.96 | 16.58 | 6.00 | 8.90 | 8.18 | 7.62 | 7.16 | 7.66 | ||||||
Median | 4.38 | 15.33 | 2.62 | 5.81 | 5.62 | 5.99 | 6.29 | 6.78 | ||||||
3rd quartile | 3.69 | 14.21 | 0.47 | 3.66 | 3.49 | 4.31 | 5.05 | 6.11 | ||||||
95th percentile | 2.73 | 10.95 | -4.21 | -2.16 | 0.87 | 2.55 | 3.78 | 4.96 | ||||||
Benchmark* | 2.99 | 15.56 | 5.01 | 7.25 | 8.08 | 7.53 | 6.66 | 7.49 | ||||||
Benchmark** | 3.26 | 16.22 | 4.56 | 7.11 | 7.82 | 7.48 | 6.82 | 7.64 | ||||||
* 45% fixed income,55% equity | ||||||||||||||
** 40% fixed income,60% equity | ||||||||||||||
Returns compounded quarterly | ||||||||||||||
Money market | ||||||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | |||||||
5th percentile | 0.88 | 3.60 | 5.09 | 5.39 | 4.77 | 3.57 | 2.68 | 2.60 | ||||||
1st quartile | 0.16 | 0.48 | 0.91 | 1.38 | 1.72 | 1.68 | 1.50 | 1.41 | ||||||
Median | 0.12 | 0.39 | 0.86 | 1.33 | 1.68 | 1.65 | 1.48 | 1.35 | ||||||
3rd quartile | 0.10 | 0.32 | 0.76 | 1.25 | 1.63 | 1.57 | 1.41 | 1.29 | ||||||
95th percentile | 0.04 | 0.22 | 0.51 | 0.99 | 1.43 | 1.45 | 1.30 | 1.20 | ||||||
Canadian bonds | ||||||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | |||||||
5th percentile | 3.38 | 13.83 | 11.43 | 9.85 | 13.28 | 10.05 | 6.18 | 7.23 | ||||||
1st quartile | 1.41 | 10.21 | 9.49 | 8.60 | 9.29 | 6.93 | 4.68 | 5.18 | ||||||
Median | 0.98 | 8.30 | 8.60 | 7.96 | 8.87 | 6.49 | 4.27 | 4.81 | ||||||
3rd quartile | 0.67 | 7.00 | 7.52 | 7.19 | 8.22 | 6.14 | 4.05 | 4.56 | ||||||
95th percentile | -0.13 | 5.49 | 1.73 | 3.16 | 4.97 | 3.82 | 3.14 | 3.06 | ||||||
Canadian bonds (Universe mandate) | ||||||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | |||||||
5th percentile | 1.71 | 9.30 | 9.95 | 8.93 | 9.35 | 7.06 | 4.64 | 5.27 | ||||||
1st quartile | 1.12 | 8.24 | 9.11 | 8.42 | 9.10 | 6.61 | 4.36 | 4.86 | ||||||
Median | 0.85 | 7.31 | 8.62 | 7.91 | 8.86 | 6.49 | 4.19 | 4.67 | ||||||
3rd quartile | 0.67 | 6.79 | 8.06 | 7.27 | 8.52 | 6.26 | 4.04 | 4.48 | ||||||
95th percentile | 0.47 | 5.45 | 5.84 | 5.89 | 7.05 | 5.33 | 3.70 | 4.06 | ||||||
Rates of return for periods ending | |||||||||||
Canadian equity – Broad* | |||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | ||||
5th percentile | 10.06 | 27.22 | 3.53 | 6.99 | 8.73 | 8.36 | 7.38 | 8.95 | |||
1st quartile | 6.66 | 23.76 | -0.82 | 2.26 | 3.98 | 5.49 | 6.23 | 7.52 | |||
Median | 5.90 | 19.41 | -3.93 | -0.46 | 2.26 | 3.56 | 4.98 | 6.87 | |||
3rd quartile | 4.63 | 16.18 | -6.50 | -4.12 | -0.71 | 1.59 | 4.11 | 5.73 | |||
95th percentile | 4.05 | 13.14 | -13.38 | -10.55 | -3.81 | -0.83 | 0.89 | 3.38 | |||
S&P/TSX | 4.73 | 22.51 | -3.09 | -0.03 | 3.46 | 4.26 | 5.47 | 7.16 | |||
S&P/TSX Capped | 4.73 | 22.51 | -3.09 | -0.03 | 3.46 | 4.26 | 5.47 | 7.16 | |||
* Some funds may include up to 30% in foreign content | |||||||||||
Canadian equity - Specialized | |||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | ||||
5th percentile | 15.20 | 58.87 | 13.49 | 21.10 | 10.30 | 10.41 | 9.04 | 11.29 | |||
1st quartile | 12.42 | 49.38 | 7.20 | 17.07 | 8.22 | 8.39 | 7.75 | 9.80 | |||
Median | 10.85 | 45.02 | 4.23 | 12.68 | 5.18 | 4.31 | 4.36 | 7.26 | |||
3rd quartile | 9.59 | 41.08 | 2.98 | 10.58 | 1.60 | 1.63 | 0.82 | 5.14 | |||
95th percentile | 7.49 | 37.52 | -15.08 | -12.79 | -17.22 | -12.11 | -6.69 | -2.58 | |||
S&P/TSX Small Cap | 6.64 | 47.71 | -8.59 | -2.92 | -4.79 | -3.20 | -2.11 | 4.51 | |||
BMO Small Cap weighted | 8.78 | 48.71 | -5.16 | 0.79 | -2.11 | -0.87 | 0.35 | 5.95 | |||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | ||||
5th percentile | 9.74 | 34.83 | 26.26 | 35.55 | 19.71 | 23.93 | 21.61 | 18.11 | |||
1st quartile | 9.38 | 26.23 | 13.40 | 22.22 | 16.17 | 18.24 | 18.08 | 15.70 | |||
Median | 6.61 | 23.32 | 9.56 | 16.74 | 10.52 | 13.52 | 13.45 | 12.92 | |||
3rd quartile | 5.11 | 20.40 | 2.61 | 7.17 | 6.94 | 11.36 | 11.11 | 10.84 | |||
95th percentile | 1.54 | 13.72 | -3.96 | 0.22 | 4.93 | 9.81 | 9.21 | 8.28 | |||
S&P | 6.62 | 23.46 | 8.43 | 15.98 | 11.22 | 14.80 | 14.31 | 14.14 |
Rates of return for periods ending | ||||||||||||
International equity ( | ||||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | |||||
5th percentile | 9.44 | 24.63 | 11.78 | 22.01 | 13.29 | 12.81 | 12.92 | 11.42 | ||||
1st quartile | 7.39 | 21.46 | 3.05 | 10.08 | 7.07 | 6.56 | 8.20 | 8.08 | ||||
Median | 4.92 | 15.57 | -0.15 | 6.68 | 4.01 | 4.52 | 6.22 | 6.47 | ||||
3rd quartile | 1.59 | 11.63 | -7.58 | -1.77 | -0.98 | 0.71 | 3.57 | 4.22 | ||||
95th percentile | -0.59 | 7.87 | -15.75 | -11.31 | -8.26 | -4.54 | 0.32 | 1.38 | ||||
MSCI EAFE (C$) | 2.78 | 12.98 | -4.30 | 1.39 | 1.22 | 2.85 | 5.38 | 5.18 | ||||
Global equity ( | ||||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | |||||
5th percentile | 9.47 | 33.69 | 24.00 | 35.02 | 20.65 | 19.87 | 18.87 | 16.82 | ||||
1st quartile | 7.76 | 24.35 | 7.46 | 17.34 | 12.07 | 13.92 | 13.04 | 11.94 | ||||
Median | 5.34 | 21.80 | 0.50 | 6.66 | 4.74 | 8.28 | 8.70 | 9.57 | ||||
3rd quartile | 3.55 | 14.84 | -6.32 | -1.24 | 0.80 | 4.35 | 6.19 | 7.39 | ||||
95th percentile | 2.23 | 9.82 | -10.86 | -4.96 | -3.06 | 1.44 | 4.30 | 5.20 | ||||
5.85 | 20.89 | 4.76 | 11.39 | 7.79 | 10.13 | 10.70 | 10.39 | |||||
Emerging markets | ||||||||||||
3 months | 6 months | 9 months | 1 year | 2 years | 3 years | 4 years | 5 years | |||||
5th percentile | 12.19 | 35.00 | 15.23 | 24.44 | 13.24 | 9.93 | 12.46 | 13.38 | ||||
1st quartile | 9.83 | 27.18 | 4.88 | 16.90 | 10.27 | 7.14 | 10.60 | 11.71 | ||||
Median | 8.39 | 23.89 | 3.95 | 13.82 | 7.73 | 5.96 | 8.16 | 9.47 | ||||
3rd quartile | 7.35 | 21.89 | -4.09 | 2.49 | 2.64 | 1.90 | 4.99 | 6.02 | ||||
95th percentile | 1.54 | 11.03 | -10.63 | -8.66 | -3.87 | -3.07 | 0.28 | 3.29 | ||||
MSCI Emerging markets | 7.59 | 21.67 | 2.07 | 11.89 | 6.18 | 5.07 | 7.92 | 9.28 |
The information herein has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does
SOURCE
© Canada Newswire, source