Canadian Master Trust Ahead in Q104

May 4, 2004 ( - Canadian institutional investors including corporate defined benefit pension plans were ahead by 3.9% during the first quarter of 2004, according to a news release.

The announcement said the Russell/Mellon Total Fund Canadian Trust Universe got a boost from Canadian equities’ performance. The median pension fund return for Canadian equity was 4.4% with the median pension fund allocation to equities was 61.5% during the quarter.

Meanwhile, Canadian fixed income also contributed a boost, gaining 3.2%, and benefiting from a 50 basis point drop in interest rates.

Asset mix continued to be the dominant factor in driving returns. Many funds have been preoccupied with their asset mix policy ensuring that they benefit from the rise in equity markets, but also protecting against the potential downside by properly diversifying the fund’s assets, the announcement said.

Canadian plan sponsors continue to show more interest in foreign investments, according to the announcement. The median asset allocation to U.S. and non-North American markets increased to 31.3% from 29.2% in the fourth quarter of 2003. Returns from non-Canadian based holdings also benefited from a weakening of the Canadian dollar, which depreciated by 1.7%, closing at 76.08 cents U.S., in the first quarter of 2004.

The median plan sponsor return for U.S. equities was 3.4%, while the non-North-American median return added 5.6% for the quarter, the news release said.

The Russell/Mellon Canadian Trust Universes covers corporate defined benefit pension plans, foundations, endowments, and public funds with more than 450 accounts representing over $156 billion Canadian in assets.