Canadian defined benefit pension plans saw a median return of 0.27 per cent for the third quarter of 2022 amid a challenging economic environment, according to the BNY Mellon Canadian master trust universe.

The universe, which is designed to provide peer comparisons by plan type and size, comprises 80 Canadian corporate public and university pension plans. It found the one-year median return as of Sept. 30, 2022 was negative 7.55 per cent, while the median 10-year annualized return was up 7.16 per cent.

“Financial markets experienced a challenging third quarter,” said David Cohen, director of global risk solutions at BNY Mellon, in a press release. “Central banks accelerated their fight against persistent inflation by increasing interest rates, the war in Ukraine continues to disrupt supply chains and impact energy prices and China’s zero-COVID policy evokes lockdown concerns.

Read: Canadian DB pension plan assets down 7.33% in Q2: report

“Despite these headwinds, the median Canadian pension plan sponsor achieved slight positive returns this quarter. Strong performance in the month of July helped offset the underwhelming months of August and September. Private asset investments provided strong support in Q3, despite negative returns from public equity.”

Among traditional asset classes, U.S. equity and fixed income posted the highest performance, with a quarterly median return of 0.96 per cent, respectively. Global equity returns were the lowest, posting a negative quarterly return of negative 3.23 per cent.

In non-traditional asset classes, hedge funds delivered the highest performance, with a quarterly median return of 5.59 per cent. Private equity ended the quarter with a median return of 3.55 per cent and real estate delivered a positive performance for the quarter, returning 4.59 per cent.

Read: Canadian institutional investors’ losses reach 4.61% in Q1: report