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Fourth Quarter 2011 Review

Ryan Kuruliak — Tue, 31 Jan 2012 13:52:10 +0000

Canadian Equity

The Canadian economy regained some of the momentum it lost earlier in the year and reported positive GDP. The Canadian equity market as measured by the S&P/TSX Composite Index grew 3.6% over the quarter but finished the year down 8.7%. Gains were led by the industrials sector followed by the energy sector which posted positive results following three quarters of significant underperformance. Information technology and materials were the only sectors posting negative results over the quarter, and were consequently the worst performers over the year. The Canadian dollar appreciated against the U.S. dollar and the Euro over the quarter.

Foreign Equity

Global equity markets were also positive with the MSCI World Index returning 5.3% over the quarter, driven by the strong performance of the United States. A flight to quality elevated the demand for the U.S. securities, helping the S&P 500 Index to return 9.5% (CAD) over the quarter. The U.S. also witnessed positive but subdued growth in manufacturing and consumption, improving from depressed levels. Emerging markets continued to trail their developed counterparts, finishing the year down 16.1%.

Fixed Income

Fixed income posted positive returns with the DEX Universe Bond Index advancing 2.1% during the quarter as provincial and municipal bonds outperformed the broader Index while federal and corporate issues underperformed. Long-term bonds continued to significantly outpace shorter-term maturities, finishing the year up 18.1%. The Bank of Canada maintained its overnight rate at 1.0%, while the U.S. Federal Reserve

left the Fed Funds Rate target unchanged at 0–0.25%.

“What is Pension Governments?”

admin — Wed, 11 Jan 2012 16:56:20 +0000

Gord Lewis, Vice President, takes a look back at the evolution of pension governance over the past 20 years in this article from the December 2011 edition of Benefit and Pensions Monitor.

Back to basics: What, me, rebalance?

Ryan Kuruliak — Fri, 02 Dec 2011 15:49:35 +0000

Ryan Kuruliak’s most recent Benefits Canada Expert Panel article can be found here.

The article discusses the benefits and challenges of portfolio rebalancing.

Benefits Canada – First Watch – Matching money manager fees to performance

Ryan Kuruliak — Tue, 27 Sep 2011 16:49:40 +0000

Proteus was a featured commentator in a recent Benefits Canada magazine article (September 2011) (PDF) (Online) relating to manager fees and performance based fee structures.

From the article:

‘Kuruliak notes that plan sponsors are looking at managers and pushing fee issues to make sure their interests are aligned, and they’re getting what they pay for. “Certainly, the awareness and understanding of fees has gone way up, and people want to understand what they’re being charged—to know they are getting value for that.”’

Benefits Canada Target Date Article – Part 2

Ryan Kuruliak — Fri, 16 Sep 2011 17:39:12 +0000

In this article, Ryan Kuruliak, Vice President, further examines Target Date Funds in Canada and provides a framework for institutional investors to evaluate the options in the market place.

Other Benefit Canada Expert Panel articles written by Ryan are a archived here.

Second Quarter 2011 Review

Ryan Kuruliak — Fri, 16 Sep 2011 17:36:18 +0000

Canadian Equity

The Canadian stock market continued to be resilient in the first quarter as a global economic recovery drove the S&P/TSX Composite to a gain of +3.1%. This is the fourth consecutive quarter of positive returns. Nine of the ten equity sectors finished positive. The strongest performing sectors were financials, health care and consumer discretionary while the sole negative result came from energy. Small cap stocks continued to lead large caps with the S&P/TSX Small Cap Index up 4.9% in the fourth quarter.

Global Equity

While concerns remain about the sustainability of the economic recovery, the S&P 500 Index added another 2.3% in CAD in the first quarter, continuing a rally that has been in place since last summer. Exchange rates had a large negative impact on foreign returns as the Canadian Dollar appreciated further against major currencies which detracts directly from Canadian returns. International (EAFE) equity markets ended the quarter down 2.3% in CAD with the Greece debt crisis hanging over markets. Regionally, Europe (-4.9% CAD) underperformed the Pacific +2.8%). The top performing countries were Finland (+8.3%) and Denmark (+6.2%), while Greece (-16.0%) and Spain (-18.0%) had the largest declines. Emerging markets were down 0.9% in CAD.

Fixed Income

Fixed income returns were positive during the first quarter as the DEX Universe Index was up 1.3%. Gains were led by corporate bonds which increased 2.2% as credit spreads narrowed. Central banks in Canada and the U.S. maintained their near zero interest rate policies; however, with strengthening economic data coming in, they began pulling back on some of the temporary liquidity measures that were introduced during the credit crisis. These moves caused the yield curve to shift up in the short-end and flatten on the long-end as the market anticipates interest rate hikes to begin in the next few quarters.

Finding the Target (Date Fund)

Ryan Kuruliak — Fri, 17 Jun 2011 15:24:11 +0000

Ryan Kuruliak, Vice President recently completed an article for Benefits Canada’s Expert Panel relating to Target Date Fund evaluation. This first article focuses on Glide Path construction.

Check back often for more articles in this series along with other topics of interest to institutional investors and pension plans.

First Quarter 2011 Review

Ryan Kuruliak — Fri, 13 May 2011 14:15:07 +0000

Continuing the trend of the second half of 2010, the Canadian equity market posted strong first quarter results with the S&P/TSX Composite Index up 5.6% over the period. Gains were led by the health care sector (which represents only 1% of the overall Index) and the energy sector as crude oil prices increased in the face of rising political tension within the Middle-East and Northern Africa. Materials was a poor performing sector despite the rise in commodity prices globally. Small cap stocks lagged their large cap counter parts.

Global equity markets posted positive results during the quarter but trailed the Canadian equity market. U.S. equities were up 3.5% in Canadian Dollars ($C). Gains were led by the energy sector as fuel prices continued to increase. The depreciation of the U.S. dollar versus the Canadian dollar negatively impacted foreign holdings.

The European region returned 4.3% ($C) in spite of concerns of potential economic bail-outs for peripheral European countries. Expectedly, the Japanese equity market declined 6.9% as the nation tries to rebuild following the tragic natural disasters and nuclear crises, which interrupted manufacturing supply chains globally. Emerging markets trailed developed markets due to worries regarding rising inflation.

Fixed income returns were negative once again as the DEX Universe Bond Index declined 0.3%. Corporate issues provided positive results while government bonds were in negative territory. Short-term bonds significantly outpaced longer term maturities. The Bank of Canada maintained the overnight rate at 1% while the U.S. Federal Reserve maintained their target of 0 – 0.25%.

Canadian Pension and Benefits Institute / Benefits Canada – DB Governance

Ryan Kuruliak — Fri, 25 Feb 2011 17:46:09 +0000

Ryan Kuruliak, Vice President was the featured presenter at the Canadian Pension and Benefits Institute (CPBI) Fundamentals Series on DB Pensions.

His discussion covered the future of DB plans in Canada from a governance perspective. His discussion was covered in Benefits Canada.

The Economy and Financial Markets Review – Q4 2010

Ryan Kuruliak — Wed, 09 Feb 2011 18:36:35 +0000

With strong market performance in the second half of 2010, driven by improving and stabilizing economic data, most markets have recovered nearly all the value that was lost during the crash of late 2008.

The Canadian stock market had a strong fourth quarter with the S&P/TSX Composite Index up 9.4%. The materials and energy sectors led the gains as commodities such as crude oil, copper and uranium were higher during the quarter. All sectors had a positive quarter with the weakest sector being telecommunications which was only up 0.5%. Small cap stocks outperformed large caps.

Global equity markets had a positive fourth quarter. U.S. equities gained 7.0% in Canadian Dollars ($C) as measured by the S&P 500 Index. The energy sector led the way and all sectors posted positive returns with the exception of utilities. International (EAFE) equity markets ended the quarter up 3.3% ($C) as Ireland became the second European Union (EU) country to require a bailout from the EU and International Monetary Fund. Regionally, Japan outperformed Europe. Emerging markets were up 4.0% ($C).

Fixed income returns were slightly negative as the DEX Universe Bond Index was down 0.7%. Corporate bonds outperformed provincial, municipal and federal government bonds though all issuer types experienced negative returns. Short-term bonds outperformed longer maturities as the yield curve flattened during the quarter. The Bank of Canada maintained the overnight rate at 1% while the U.S. maintained their near zero interest rate policies.