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.

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