Diversified pooled fund managers posted a median return of 2.5% before management fees in the second quarter (Q2) despite the recent challenging geopolitical circumstances, according to results of Toronto-based Morneau Shepell Inc.’s Performance Universe of Pension Managers’ Pooled Funds report for Q2.
“Pension funds had a very good quarter despite market uncertainty and volatility stemming from the [U.K.’s] referendum on leaving the European Union,” says Jean Bergeron, a partner in the firm’s asset- and risk-management consulting team, in a statement.
Canadian equity managers posted the highest median return by delivering 3.3% — although this was lower than the 5.1% achieved by the S&P/TSX composite index. Canadian bond managers posted a median return of 2.7%, which was 0.1 percentage points above the benchmark.
Foreign equity managers had the most success in delivering median returns that beat the securities’ corresponding benchmarks. They delivered 2.3% for U.S. equities compared with 1.9% for the S&P 500 composite index; 1.8% for global equities vs 1.4% for the MSCI world index; and 2.8% for emerging markets equities compared with 1.2% for the MSCI emerging markets index.
However, they posted a negative return of 1.4% for international equities compared with 1.1% for the MSCI EAFE index.
In alternative investments, the Dow Jones Credit Suisse hedge fund index posted a negative return of 0.1% for Q2.
Morneau Shepell’s performance universe covers approximately 341 pooled funds managed by almost 50 investment-management firms. The pooled funds included in the universe have a market value of more than $278 billion.
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