Morneau Shepell (TSX: MSI) has released the results of its Performance Universe of Pension Managers’ Pooled Funds for the fourth quarter of 2020.

According to the report, in the fourth quarter of 2020, diversified pooled fund managers posted a median return of 5.7 per cent before management fees and 9.3 per cent since the beginning of the year.

“The stock market rebound continued into the fourth quarter, most market indices showed positive returns. The MSCI World Index delivered 8.7 per cent return for the fourth quarter, while the bond market posted a return of 0.6 per cent. The Canadian Equity S&P/TSX Composite Index posted a return of 9.0 per cent and the U.S. stock S&P 500 Index registered a return of 12.2 per cent (in U.S. dollars) and 7.0 per cent in Canadian dollars. The Emerging Markets Index posted a return of 14.2 per cent (in Canadian dollars),” said Jean Bergeron, Partner for the Morneau Shepell Asset & Risk Management consulting team.

“The good returns obtained in the fourth quarter enabled pension funds to improve their financial position. We estimate that the solvency ratio of an average pension fund has increased by around 2.3 per cent to 5.5 per cent in 2020,” added Bergeron.

During the fourth quarter of 2020, diversified pooled fund managers obtained a median return of 5.7 per cent, which was 0.3 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. Since the beginning of the year, the median pension fund return was 9.3 per cent, which was 1.3 per cent lower than the benchmark portfolio.

Canadian bonds In the fourth quarter of 2020, managers obtained a median return of positive 1.0 per cent on bonds (Universe mandate); the return was 0.4 per cent higher than the benchmark index. Since the beginning of the year, managers posted a median return, which was 1.1 per cent above the benchmark index.

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