Morneau Shepell releases the results of its Performance Universe of Pension Managers' Pooled Funds
Morneau Shepell (TSX: MSI) has released the results of its Performance Universe of Pension Managers' Pooled Funds for the first quarter of 2021.
According to the report, in the first quarter of 2021, diversified pooled fund managers posted a median return of 1.8 per cent before management fees.
"The stock market continued to rise in the first quarter and the MSCI World Index delivered a 3.5 per cent return. The Canadian Equity S&P/TSX Composite Index posted a return of 8.1 per cent in the first quarter and the U.S. stock S&P 500 Index registered a return of 6.2 per cent (in U.S. dollars) and 4.9 per cent in Canadian dollars. The Emerging Markets Index posted a return of 1.0 per cent (in Canadian dollars). During the first quarter of 2021, bond interest rates rose significantly and returns were negative. For the Canadian bond market as a whole, the return was negative 5.0 per cent," said Jean Bergeron, Partner for the Morneau Shepell Asset & Risk Management consulting team.
"The increase in interest rates reduced the actuarial liability of pension funds in the first quarter, thereby improving their financial position. We estimate that the solvency ratio of an average pension fund has increased by around 4.2 per cent to 7.0 per cent in 2021," added Bergeron.
During the first quarter of 2021, diversified pooled fund managers obtained a median return of 1.8 per cent, which was 2.1 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.
During the first quarter of 2021, short-term, mid-term and long-term bond indices posted returns of negative 0.6 per cent, negative 4.5 per cent and negative 10.7 per cent, respectively. The high-yield bond index posted a return of 2.2 per cent, while the real return bond index provided a negative 7.3 per cent return.
During the first quarter of 2021, the S&P/TSX Small Cap Index gained 9.7 per cent, whereas the S&P/TSX Completion Index representing mid-cap stocks registered an increase of 5.4 per cent, and the large-cap S&P/TSX 60 Index grew by 8.8 per cent.
The Performance Universe covers about 285 funds managed by nearly 46 investment management firms.
The results of Morneau Shepell's study are based on the returns provided by leading portfolio managers, ranging from independent investment management firms to insurance companies, trust companies and financial institutions. The returns are calculated before deduction of management fees.
The Asset & Risk Management consulting team at Morneau Shepell produces the quarterly Performance Universe results. This team provides independent consulting services on all aspects of asset and liability management of pension funds, endowment funds, and other institutional investment funds.
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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 Morneau Shepell Asset & Risk Management Ltd. ("MS ARM") or its affiliates ("Morneau Shepell") assume any responsibility or liability. MS ARM or Morneau Shepell is not liable for any errors or omissions in the information or for any loss or damage suffered. Where such statements are based in whole or in part on information provided by third parties, they are not guaranteed to be accurate or complete. The information does not provide individual financial, legal, tax or investment advice and is for information purposes only.