All About Estates

7th Annual Trustee Investment Review

This is my 7th annual year end investment review for Trusts.
As I have indicated in the past, Trustees are accountable for a prudent investment policy. This includes a review of the performance of the investments in the Trust. For Trusts that hold a portfolio of marketable securities, a fundamental element of the review includes a comparison of the performance of the investments in the Trust against relevant benchmarks. For the past several years I have typically suggested the following for benchmarking purposes;


As at December 31,2016

S&P/TSX Composite total return ($Cdn)     1-year 21.08%  5-year 8.25%

MSCI World Index, total return($USD)       1-year 8.15%     5-year 11.04%

S&P 500 composite total return ($USD)      1-year 11.96%   5-year 14.66%

FTSE TMX Universe total return ($Cdn)       1-year 1.66%     5-year 3.22%


The specific portfolio objective would dictate the relative weightings of these benchmarks. A ‘growth’ portfolio might have a large percentage in equities, including U.S. and international stocks. Whereas ‘conservative balanced’ portfolio, might have less equities and more bonds.

The markets often do not like uncertainty but despite the number of major unexpected events (the Alberta wildfires, Brexit and Trump getting elected) that unfolded in 2016, the Markets performed relatively well or at least better than expected.

As at the end of 2016, the yield on 10 year Canada Bonds was largely unchanged at 1.72%.

The Canadian dollar appreciated 3% against the U.S. dollar, 6% against the Euro and 19% against the British Pound. In case you were wondering the Canadian dollar fell against a couple of currencies including the Brazilian Real and the Iceland Krona.

The benchmark performance review however, is not the only consideration when reviewing the performance of the Investment Advisor for Trust. The Trustee(s) should seek confirmation from the investment advisor that the portfolio has been compliant with the investment policy statement over the past period(s). In addition, the Trustee needs to be satisfied with the degree of risk, diversification, volatility and liquidity. Most importantly, a Trustee needs to be assured that the Advisor providing the advice and direction that was originally agreed upon with the Advisor.

Tagged in:
About Paul Fensom
Scotiatrust offers a full range of estate, trust and philanthropic advisory services designed to meet a client’s personal objectives and designed to evolve across a variety of life stages and financial events. Email: