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LifeWorks releases the results of its Performance Universe of Pension Managers’ Pooled Funds

·11-min read

Pension funds post high second-quarter returns

TORONTO, July 22, 2021--(BUSINESS WIRE)--LifeWorks (TSX: LWRK) has released the results of its Performance Universe of Pension Managers’ Pooled Funds for the second quarter of 2021.

According to the report, in the second quarter of 2021, diversified pooled fund managers posted a median return of 5.2 per cent before management fees and 7.2 per cent since the beginning of the year.

"The stock market continued to rise in the second quarter and the MSCI World Index delivered a 6.2 per cent return. The Canadian Equity S&P/TSX Composite Index posted a return of 8.5 per cent in the second quarter and the U.S. stocks S&P 500 Index registered a return of 8.6 per cent (in U.S. dollars) and 7.0 per cent in Canadian dollars. The Emerging Markets Index posted a return of 3.6 per cent (in Canadian dollars). During the second quarter of 2021, the Canadian bond market posted a return of 1.7 per cent," said Jean Bergeron, Partner for the Investment & Risk consulting team.

"The financial position of pension funds has improved since the start of the year. We estimate that the solvency ratio of an average pension fund increased by around 9.0 per cent in the first two quarters of the year," added Bergeron.

During the second quarter of 2021, diversified pooled fund managers obtained, on average, returns that exceeded that of the benchmark portfolio. The median return was 5.2 per cent, which was 0.1 per cent higher than for the benchmark portfolio used by many pension funds (with an allocation of 55 per cent in equity and 45 per cent in fixed income).

Canadian bonds

In the second quarter of 2021, managers obtained a median return of 1.8 per cent on bonds (Universe mandate), which was 0.1 per cent higher than the benchmark index.

During the second quarter of 2021, short-term, mid-term and long-term bond indices posted returns of 0.1 per cent, 1.6 per cent and 3.7 per cent, respectively. The high-yield bond index posted a return of 2.6 per cent, while the real return bond index provided a 3.5 per cent return.

Canadian equities

In the second quarter of 2021, the median return for Canadian equity managers was 7.7 per cent, which was 0.8 per cent lower than the 8.5 per cent posted by the S&P/TSX Index.

During the second quarter of 2021, the S&P/TSX Small Cap Index gained 9.2 per cent, whereas the S&P/TSX Completion Index representing mid-cap stocks registered an increase of 6.9 per cent, and the large-cap S&P/TSX 60 Index grew by 9.0 per cent.

Foreign equities

Foreign equity managers’ median returns and appropriate benchmark index returns for the second quarter of 2021 are as follows:

  • 6.8 per cent for U.S. equities versus 7.0 per cent for the S&P 500 Index (C$)

  • 3.6 per cent for international equities versus 3.6 per cent for the MSCI EAFE Index (C$)

  • 5.6 per cent for global equities versus 6.2 per cent for the MSCI World Index (C$)

  • 1.8 per cent for emerging market equities versus 3.6 per cent for the MSCI Emerging Markets Index (C$)

Alternative investments

The Dow Jones Credit Suisse Hedge Fund Index (formerly CSFB/Tremont Hedge Fund Index) posted a return of 1.5 per cent (C$) for the second quarter of 2021.

The Performance Universe covers about 285 funds managed by nearly 46 investment management firms.

The results of our study are based on the returns provided by leading portfolio managers, ranging from independent investment management firms to insurance companies, trust companies and financial institutions. The returns are calculated before deduction of management fees.

The Investment & Risk consulting team at LifeWorks produces the quarterly Performance Universe results. This team provides independent consulting services on all aspects of asset and liability management of pension funds, endowment funds, and other institutional investment funds.

About LifeWorks

LifeWorks is a global leader in delivering technology-enabled solutions that help clients support the total wellbeing of their people and build organizational resiliency. By improving lives, we improve business. Our solutions span employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement and financial consulting, actuarial and investment services. LifeWorks employs more than 7,000 employees who work with more than 24,000 client organizations that use our services in more than 160 countries. LifeWorks is a publicly traded company on the Toronto Stock Exchange (TSX: LWRK). For more information, visit lifeworks.com.

ID-CORP, ID-RS

Summary

Rates of return for periods ending June 30, 2021
(annualized returns beyond one year)

Diversified

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

6.46

12.69

19.72

28.32

14.63

10.96

10.04

10.49

1st quartile

5.54

8.70

16.25

21.38

11.47

9.31

9.15

9.70

Median

5.19

7.16

12.88

18.04

10.27

8.64

8.26

8.57

3rd quartile

4.72

5.79

11.46

16.04

9.71

8.18

7.68

7.90

95th percentile

3.80

3.57

7.78

14.18

8.10

6.54

6.78

6.92

Benchmark*

5.11

4.80

10.41

13.72

9.82

8.77

8.27

8.26

Benchmark**

5.33

5.73

11.84

15.48

10.46

9.11

8.65

8.71

* 45% fixed income,55% equity

** 40% fixed income,60% equity

Returns compounded quarterly

Money market

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

0.25

0.31

0.73

1.54

3.13

3.41

2.77

2.39

1st quartile

0.16

0.17

0.41

0.73

1.27

1.54

1.52

1.41

Median

0.08

0.14

0.27

0.43

1.09

1.40

1.38

1.29

3rd quartile

0.06

0.09

0.23

0.35

1.02

1.35

1.34

1.23

95th percentile

0.04

-0.10

0.17

0.28

0.98

1.28

1.28

1.20

Canadian bonds

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

3.97

2.72

7.76

11.64

5.79

6.57

5.23

5.34

1st quartile

2.19

-2.26

-0.38

1.16

4.15

5.43

4.50

3.98

Median

1.87

-3.07

-1.97

-0.95

3.59

4.91

4.00

3.34

3rd quartile

1.63

-3.49

-2.72

-2.23

3.03

4.59

3.73

3.05

95th percentile

1.26

-7.04

-6.06

-6.28

2.32

3.91

3.24

2.69

Canadian bonds (Universe mandate)

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

2.43

-1.78

-0.05

2.08

4.34

5.45

4.42

4.15

1st quartile

1.96

-2.85

-1.79

-0.65

3.76

4.93

3.98

3.35

Median

1.78

-3.14

-2.18

-1.38

3.48

4.75

3.80

3.14

3rd quartile

1.63

-3.41

-2.60

-2.06

3.13

4.55

3.65

2.98

95th percentile

1.41

-3.87

-3.47

-2.91

2.52

4.07

3.35

2.73

Rates of return for periods ending June 30, 2021
(annualized returns beyond one year)

Canadian equity – Broad*

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

9.43

21.56

40.16

48.12

16.70

13.13

12.44

12.33

1st quartile

8.32

18.20

29.57

37.69

14.92

11.41

11.05

11.22

Median

7.69

16.79

27.06

33.38

13.51

10.33

10.11

10.50

3rd quartile

6.25

14.24

22.88

30.68

12.62

9.17

9.18

10.00

95th percentile

4.77

10.83

17.22

24.45

10.10

6.77

6.86

7.67

S&P/TSX

8.54

17.28

27.81

33.85

14.43

10.80

10.70

10.77

S&P/TSX Capped

8.54

17.28

27.81

33.85

14.43

10.80

10.70

10.77

* Some funds may include up to 30% in foreign content

Canadian equity – Specialized

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

11.44

24.56

46.34

65.63

31.08

19.19

15.88

15.81

1st quartile

10.97

22.53

42.85

56.70

27.65

16.51

14.28

13.85

Median

9.95

18.69

37.69

52.17

25.19

14.76

13.16

12.24

3rd quartile

8.34

14.30

29.36

44.06

21.52

13.12

10.45

10.15

95th percentile

6.48

12.81

24.71

41.23

15.62

4.44

3.61

3.90

BMO Small Cap weighted

9.06

21.80

46.97

59.88

21.33

11.66

9.98

9.66

S&P/TSX Small Cap

9.15

19.78

47.90

57.72

19.09

9.23

8.26

7.34

U.S. equity

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

10.58

16.97

28.36

36.21

26.32

21.15

22.26

22.10

1st quartile

7.95

13.25

23.08

30.88

21.65

17.56

16.91

17.49

Median

6.76

11.91

19.85

28.35

19.45

16.61

15.72

16.73

3rd quartile

6.10

8.33

16.38

26.81

16.89

14.83

13.75

15.00

95th percentile

4.81

6.54

13.42

21.74

13.50

11.02

11.72

11.75

S&P 500 (C$)

6.99

12.19

20.10

28.05

19.73

16.30

16.24

16.68

Rates of return for periods ending June 30, 2021
(annualized returns beyond one year)

International equity (Europe and Asia)


3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

6.21

10.93

27.91

38.15

18.07

14.11

13.72

14.79

1st quartile

4.84

7.56

21.31

29.49

14.54

9.39

9.36

11.82

Median

3.60

5.50

16.76

20.92

10.77

7.78

7.69

10.00

3rd quartile

2.70

3.74

11.69

17.27

7.40

4.85

6.04

8.53

95th percentile

1.62

2.69

8.79

12.30

3.76

0.74

1.99

5.06

MSCI EAFE (C$)

3.62

5.78

17.08

20.33

9.08

6.11

6.63

9.23

Global equity (U.S.A., Europe and Asia)

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

8.63

15.64

34.28

41.44

22.30

18.20

18.61

18.87

1st quartile

6.96

12.28

24.20

32.90

18.75

14.22

14.15

15.31

Median

5.63

9.72

20.27

27.30

16.34

10.92

10.97

13.37

3rd quartile

4.27

8.02

16.95

23.14

10.61

8.33

8.99

10.52

95th percentile

3.15

5.77

9.89

16.73

6.34

5.73

6.02

7.63

MSCI World (C$)

6.15

9.88

19.43

26.42

16.41

12.70

12.65

13.74

Emerging markets

3 months

6 months

9 months

1 year

2 years

3 years

4 years

5 years

5th percentile

6.15

10.73

23.76

33.70

18.36

13.16

12.69

15.87

1st quartile

2.64

5.51

21.09

31.97

17.00

11.81

11.59

15.05

Median

1.78

3.10

19.59

29.46

14.73

10.08

9.79

12.27

3rd quartile

1.11

1.08

16.46

25.91

8.54

6.30

6.28

8.68

95th percentile

0.15

-0.16

11.96

18.64

3.39

3.03

2.29

3.93

MSCI Emerging markets

3.57

4.57

19.46

28.52

13.96

9.44

9.58

12.35

The information herein has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does LifeWorks Investment Management Ltd. ("LWIM") or its affiliates ("LifeWorks") assume any responsibility or liability. LWIM or LifeWorks is not liable for any errors or omissions in the information or for any loss or damage suffered. Where such statements are based in whole or in part on information provided by third parties, they are not guaranteed to be accurate or complete. The information does not provide individual financial, legal, tax or investment advice and is for information purposes only.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005907/en/

Contacts

For additional information, please contact:

Heather MacDonald
LifeWorks
1-855-622-3327
media@lifeworks.com

Jean Bergeron, FSA, FCIA, CFA
Partner, Asset and Risk Management
514-392-7852
jean.bergeron@lifeworks.com

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