Canadian pension plans see modest gains in Q2

BNY Canadian Asset Strategy View has reported a median return of 1.14 percent for the second quarter this year.

As of June 30, the one-year median return stood at 10.10 percent, while the 10-year annualized return was 6.63 percent. The results are based on $308bn in investment assets within Canadian investment plans, with an average plan size of $4bn.

This universe includes 77 Canadian corporate, public, and university pension plans, providing peer comparisons by plan type and size.

David Cohen, director of Global Risk Solutions at BNY, noted that Canadian pension plans saw modest positive returns in Q2, despite financial market volatility influenced by geopolitical tensions and central bank policies.

He emphasized that despite a challenging start to the quarter, both Equity and Fixed Income segments concluded with generally positive returns, maintaining their strong performance for 2024. Private asset classes remained robust, contributing positively to Q2 returns.

International Equity recorded the highest performance among traditional asset classes, with a quarterly median return of 2.44 percent. Conversely, Canadian Equity had the lowest returns, with a negative quarterly return of -0.45 percent.

Hedge Funds led the performance in non-traditional asset classes, achieving a quarterly median return of 3.16 percent. Private Equity followed with a 3.08 percent median return, while real estate posted a flat performance of 0.33 percent for the quarter.

The BNY Canadian Asset Strategy View universe for pension plans over $1bn outperformed the median return of the total universe in Q2 2024.

Canadian Foundations and Endowments achieved a median performance of 1.70 percent for the second quarter, surpassing both Public Pension Plan and Corporate Pension Plan universes. Most major equity segments posted positive returns during this period.

Canadian Equity reported a negative median return of -0.45 percent, which was slightly better than the S&P/TSX Composite Index's -0.53 percent return. US Equity posted a quarterly median return of 1.18 percent, lagging behind the S&P 500 Index's 5.45 percent return.

Global Equity had a median return of 2.01 percent, underperforming the MSCI World Index's 3.93 percent return. International Equity's quarterly median return of 2.44 percent exceeded the MSCI EAFE Index's 0.95 percent return.

Emerging Markets Equity reported a positive median performance of 5.13 percent, trailing the MSCI Emerging Markets Index's 6.29 percent return.

The Canadian Fixed Income median return was 0.80 percent in the second quarter of 2024, underperforming the FTSE Canada Universe Bond Index's 0.86 percent return.

Private Equity achieved a positive quarterly median return of 3.08 percent, while Real Estate had a median return of 0.33 percent. Hedge Funds reported a return of 3.16 percent for the quarter.

BNY Canadian Asset Strategy View Universe Median Plan Returns: