Morneau Shepell (TSX: MSI) has released the results of its Performance Universe of Pension Managers’ Pooled Funds for the third quarter of 2019.

According to the report, in the third quarter of 2019, diversified pooled fund managers posted a median return of 1.5 per cent before management fees. Since the beginning of the year, the return has been 12.8 per cent.

“In general, markets posted positive returns in the third quarter, despite higher volatility. The FTSE Canada Universe Bond Index posted a return of 1.2 per cent. The Canadian Equity S&P/TSX Composite Index posted a return of 2.5 per cent and the MSCI World (Developed Markets) Index obtained a return of 1.9 per cent (in Canadian dollars).

Emerging markets were the only ones with negative returns, with the MSCI Emerging Markets index posting a negative 2.8 per cent (in Canadian dollars),” said Jean Bergeron, vice-president responsible for the Morneau Shepell Asset & Risk Management consulting team.

“Although returns have been good since the year started, the decrease in interest rates has caused the solvency liability of many pension funds to increase at a faster pace than their assets.

This means that on a solvency basis, pension fund financial positions have decreased by about 2 to 5 per cent since the beginning of the year,” added Bergeron.

During the third quarter of 2019, diversified pooled fund managers obtained a median return of 1.5 per cent, which was 0.3 per cent under 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 2019, managers obtained a median return of 1.2 per cent on bonds (Universe mandate), which was equal to the benchmark index. During the same period, short-term, mid-term and long-term bond indices posted returns of 0.3 per cent, 0.9 per cent and 2.5 per cent respectively. The high-yield bond index posted 2.0 per cent, while the real return bond index provided a 1.3 per cent return.

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