Equities and hedge funds offset bond losses in BNY pension universe
Canadian pension plans ended 2025 with a solid year, even though fixed income dragged on a muted fourth quarter.
The BNY Canadian Asset Strategy View universe reported a median return of 0.75 percent in Q4 2025 and 7.85 percent for the year to December 31, with a 10‑year annualized median of 6.67 percent (all gross of fees, in Canadian dollars).
David Cohen, director of Global Risk Solutions at BNY, said Q4 was marked by “extended geoeconomic fragmentation, protectionist trade policies, and elevated conflict risk across all regions, while inflation continued to cool globally.”
He noted that Canadian pension plans still posted “a slightly positive return in the quarter,” finishing 2025 with “a robust single digit return,” as all major equity markets gained and fixed income “detract[ed] slightly.”
Equities did the heavy lifting.
Canadian Equity delivered a 5.07 percent median return in Q4, leading traditional asset classes, although it trailed the S&P/TSX Composite Index at 6.25 percent.
US Equity returned 0.93 percent versus 1.13 percent for the S&P 500 Index.
Global Equity gained 1.23 percent compared with 1.67 percent for the MSCI World Index.
International Equity returned 2.16 percent, behind the MSCI EAFE Index at 3.35 percent, while Emerging Markets Equity returned 3.49 percent, edging past the MSCI Emerging Markets Index at 3.23 percent.
All major equity segments posted positive returns for the quarter.
Fixed income moved the other way.
Canadian Fixed Income recorded a median return of ‑0.64 percent in Q4 2025, underperforming the FTSE Canada Universe Bond Index at ‑0.32 percent.
Alternatives contributed modestly, with dispersion across strategies.
Hedge Funds led non‑traditional asset classes with a quarterly median return of 1.90 percent. Private Equity returned 0.61 percent, while Real Estate posted ‑0.56 percent.
Plan size and type also mattered.
The BNY Asset Strategy View universe of Canadian pension plans with more than $1bn in assets under management outperformed the median return of the Total Canadian Asset Strategy View Universe in Q4 2025.
By plan type, Foundations & Endowments led with a 1.11 percent median return for the quarter, ahead of Canadian Public Pension Plans at 1.09 percent and Canadian Corporate Pension Plans at 0.15 percent.
The Canadian Asset Strategy View universe covers $345bn in Canadian investment plans, with an average plan size of $5.15bn.
It includes 67 Canadian corporate, public and university pension plans, along with foundations & endowments, and is designed to support peer comparisons by plan type and size.
