Canadian Pensions Deliver 10% for 2020

---

According to Northern Trust Pension Universe* Canadian Pension Plans delivered a 10% return for 2020.

The Northern Trust universe returns are in the same ballpark as the Morneau Shepell Universe of Pension Managers’ Pooled Funds median return** of 9.3%.

Individual investors who have mimicked the Pension Investment Association of Canada‘s (PIAC’s) composite asset allocation should have found their returns to be in the same ballpark. (An over-weight to Canada was a drag on performance as Canadian REITs VRE ended 2020 lower than they started the year while Canadian Banks (TD, CM) ended pretty much where they started).

Canadian REIT ETF VRE

TD Bank

CIBC Bank

 

 

 

 

 

The message, once again, is diversification needs to be global. And yes, the 31% PIAC allocation to bonds pays off yet again. In 2020, short-term, mid-term and long-term bond indices posted returns of 5.3 per cent, 10.1 per cent and 11.9 per cent respectively.

* The Northern Trust returns are based on composite performance of Canadian institutional investment plans that subscribe to performance measurement services as part of Northern Trust’s asset service offerings.

** Note the Morneau returns are before fees and based on a 60% equity, 40% fixed income allocation.

---

Doug Cronk CFA, PRM is a Pension Investment & Risk Management Officer