2016 Annual Report

Performance Analytics
& Custodial Services

BNY Mellon Asset Servicing provides performance measurement services; and CIBC Mellon Global Security Services provides custodial and accounting services.

2016 will be remembered as a year when politics had a major influence on investment performance. We also experienced a 45% rise in oil prices and a substantial strengthening of the U.S. dollar.

The Canadian dollar traded in an 11 cent range against the U.S. dollar in 2016, buffeted by volatility in oil prices and changing expectations about central bank policy. The Bank of Canada held its benchmark interest rate at 0.5% as it sees the stronger world economy continuing to face “undiminished” uncertainty.

The S&P/TSX Composite Index achieved a 21.8% positive performance throughout most of the year 2016.

The S&P/TSX 60 Index posted a robust return of 21.36%, and the S&P/TSX Small Cap Index returned a healthy 38.48% and outperformed large cap stocks.

Canadian value stocks outperformed growth stocks in the fourth quarter of 2016 and for the year.

The FTSE TMX Canada High Yield Bond Index provided the strongest bond performance, returning 16.93% for the year ending 2016. Long term bonds outperformed bonds with other durations for the year to date period.

U.S. equities advanced in the fourth quarter of 2016, driven by the presidential election and the Federal Reserve (Fed) raising interest rates by 0.25%.

U.S. mid small cap Russell 2000 Index recorded their strongest return in 2016 of 17.11%. The Russell Value indices outperformed the Russell Growth indices for all capitalization tiers for the year 2016.

The Emerging Market Latin America region was the strongest performer in 2016, returning 26.87%.

Internationally, value stocks outperformed growth stocks.

Returns as at December 31, 2016

* NSPS LTD Balanced Fund Benchmark consists of: 5% FTSE TMX 91 day T-Bill Index, 40% FTSE TMX Bond Universe Index, 30% S&P/TSX Capped Composite Index, 12% S&P 500 Total Return Index, 13% MSCI EAFE Index
Source: BNY Mellon

Returns as at December 31, 2016

* NSPS LTD Liability Benchmark consists of: 90% FTSE TMX Bond Universe Index, 10% FTSE TMX 91 day T-Bill Index
Source: BNY Mellon

In 2016, the Plan investments posted a positive return of 4.84%. Compared to other Canadian institutional investment plans, in 2016 the Plan ranked in the third quartile of the BNY Mellon Canadian Master Trust Universe.