COVID-19 Pandemic and Financial Market Volatility

The Trustees of the Musicians’ Pension Fund of Canada (MPF Canada) fully appreciate that our members are worried in these uncertain times. We want to assure all of you that the Fund continues to prudently invest the Fund’s portfolio in accordance with the long-term nature of pension plans and does not over-react to short-term market volatility.
The Trustees of the Musicians’ Pension Fund of Canada and our professional advisors recently met by video-conference to discuss the current financial market environment impacted by the COVID-19 Pandemic and the Fund’s investment strategy.

After carefully evaluating what impact COVID-19 might have on the Fund, we arrived at the following conclusions:
  • The portfolio’s diversification across multiple asset classes (not all asset classes have been negatively impacted) is working to mitigate the downside volatility of the portfolio.
  • The pandemic will eventually run its course and business activity will resume. At some point, the markets begin to anticipate a recovery and investors are attracted back to purchase investments pushing the values higher.
  • Over the last number of years, the Trustees have made strategic investment changes to the Fund’s investments to diversify assets and to minimize portfolio volatility. These changes are inline with the Trustees’ vision of more stable and less volatile long-term returns for the Fund. 
  • We believe that a well diversified asset mix with a long-term view can help minimize the impact of market risk and help navigate markets during periods of turbulence. 
  • Stressed/dislocated markets have historically presented long-term investors with attractive opportunities for certain asset classes - such as infrastructure, real estate or private equity. The Fund includes these asset classes in its asset mix.
  • The Fund’s 1, 4, 7, and 10-year rates of return have all been positive, beating the Fund’s benchmarks. This speaks to the long-term viability of the Fund.
  • The Trustees are working diligently with their professional advisors, which include investment consultants, actuaries, and legal counsel, to regularly assess risk to the Fund and to monitor portfolio performance.  
In summary, pension plans are long-term investors and the Trustees of MPF Canada are taking a long-term view. The Trustees remain committed to the members of the Fund. The Fund’s mission is to administer the Plan in a prudent manner to ensure its long-term success, to provide the best possible retirement benefits to the Fund’s members and beneficiaries. We will continue to communicate with you as this situation evolves.

BOARD OF TRUSTEES
Musicians’ Pension Fund of Canada