Canadian Pension Plans Finish Year Strong with Big Gains in 2010, Says BNY Mellon

TORONTO, Jan. 25, 2011 /PRNewswire/ -- The median plan in the BNY Mellon Canada Total Fund Universe posted a 4.2% return for the fourth quarter of 2010, leading to a total gain of 10.2% for the year ending December 31, 2010.

With a market value of $165 billion and an average plan size of $1.9 billion, the BNY Mellon Canada Total Fund Universe is a fund-level tracking service that can be used to make peer comparisons of both performance and asset allocation results.  

"All asset classes showed significant gains during 2010," said Catherine Thrasher, managing director of BNY Mellon Asset Servicing Canada, Performance & Risk Analytics.  "Canadian based equity holdings drove the bulk of excess returns in the fourth quarter and throughout the year, posting gains of 9.5% and 16.5%, respectively."

Highlights

• Of the plans in the universe, 100% posted positive results for the quarter and year ending December 31, 2010

• Canadian equity portfolios posted a median one-year return of 16.5%, making it the strongest asset class of the year.  The U.S. equity asset class achieved a 9.07% return in Canadian dollars over the same period

• Canadian fixed income was the only asset class to not end the quarter in positive territory, posting a median return of -0.6%.  Canadian fixed income did end the year with a strong median return of 8.3%, versus the DEX Bond Universe Index return of 6.7%

• The Non-North American equity asset class posted the lowest performance for the year, with a median return of 4.7%.  Pension plans were able to outperform the MSCI EAFE Index returns of 3.3% and 2.6% in both the fourth quarter and during the year, respectively.

• Pension plans with assets greater than $1 billion dollars fared slightly better than the broad plan market, posting a median return of 4.3% for the quarter and 10.6% for the year ending December 31.

"Canadian pension plans continued to benefit from high allocations to, and strong performance from, the Canadian equity markets this year.  Since the end of 2008, the median pension fund's Canadian equity portfolio has achieved a return of nearly 25% -- more than 15 percentage points higher than the next strongest asset class," said Thrasher.

BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of specialized asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services. BNY Mellon Asset Servicing provides services through BNY Mellon and other related companies.

BNY Mellon (NYSE: BK) is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $25.0 trillion in assets under custody and administration and $1.17 trillion in assets under management, services $12.0 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Learn more at www.bnymellon.com.

DEX Bond Universe Index:  Source 2099242 Ontario Inc. (doing business as PC-BOND) © PC Bond 2011.  All rights reserved.  The information contained herein may not be redistributed, sold or modified or used to create any derivative work without the prior written consent of PC-Bond.

MSCI EAFE Index:  Morgan Stanley Capital International, MSCI, ACWI, EAFE, EMF and all other index service marks referred to in the MSCI US equity index series materials are the exclusive property of MSCI and its affiliates.  Copyright © 2010 Morgan Stanley Capital International Inc. All rights reserved.

SOURCE BNY Mellon