Morneau Shepell Endowments and Foundations Survey shows gradual change to deal with low bond yields and to improve asset allocation
TORONTO, June 15, 2015 /CNW/ - A new survey by Morneau Shepell shows endowments and foundations (E&Fs) are facing obstacles to meet spending objectives. The responses from 32 endowments and foundations across Canada indicate that the standard 60/40 split of equity and fixed income portfolios remains the predominant investment trend with some adopting more progressive strategies.
"Some E&Fs are starting to rethink their traditional modes of investment," said Rob Boston, Partner with Morneau Shepell Asset & Risk Management. "With low returns expected for bonds and higher volatility expected for stocks, investors should consider a more diverse portfolio."
The survey finds there is still a lot of inertia with the current asset allocation to fixed income. About 75 per cent of respondents intend to maintain their allocation to Canadian bonds and long bonds, whereas just over 60 per cent will maintain their allocations to Canadian corporate bonds.
"It may seem contradictory that endowments and foundations need to maintain target spending and preserve the value of the fund while at the same time operate in an unpredictable financial environment," noted Mel Bartlett, Managing Partner of Morneau Shepell's Atlantic Retirement Consulting practice. "These organizations have very real investment challenges and should consider how to mitigate risks in their portfolios by investing more broadly."
The survey also finds that more than 50 per cent of E&Fs see their biggest future challenge as earning sufficient funds to meet objectives – another reason, the report says, E&Fs should diversify to preserve sustainability.
For information on Morneau Shepell's Endowments and Foundations Survey please visit – http://www.morneaushepell.com
About Morneau Shepell Inc.
Morneau Shepell is the largest company in Canada offering human resources consulting and outsourcing services. The Company is the leading provider of employee and family assistance programs, as well as the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. Through health and productivity, administrative, and retirement solutions, Morneau Shepell helps clients reduce costs, increase employee productivity and improve their competitive position. Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With approximately 3,700 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States, and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
SOURCE Morneau Shepell Inc.