15 May 2017
Toronto
Reporter: Drew Nicol

Canadian pension fund win streak continues


Canada’s pension funds achieved a fourth consecutive quarter of growth, posting returns of 2.9 percent in Q1, according to RBC Investor & Treasury Services.

This year's Q1 returns far outstripped the 0.5 percent chalked up in Q4 2016 and set Canada’s pension industry up strongly to surpass last year’s annual return of 6.8 percent, as recorded in the All Plan Universe, which monitors $650 billion worth of Canadian pension assets.

Positive global economic conditions in Q1 2017 helped lift global equities in delivering a return of 6.2 percent, up from 3.0 per cent in Q4 2016.

The MSCI World Index reflected a similar trend, returning 5.8 percent for Q1 2017, up from 3.9 percent in Q4 2016.

Canadian equities bucked the trend in last quarter, with a returns of 2.3 percent, down from 5.7 percent in Q4.

Canadian fixed income assets rebounded in Q1, posting a return of 1.4 percent, compared to a loss of -3.4 percent in Q4 2016.

“Canadian pension plan returns, led by strength in Canadian and global equities, are off to a good start in 2017, however, vigilance is still required,” said James Rausch, head of client coverage for Canada at RBC Investor & Treasury Services.

“While ongoing business investment in Canada could spur growth, asset managers will undoubtedly be focusing on maintaining a diversified portfolio and actively managing their risk exposure in the period ahead given evolving macro-economic and political forces around the world.”

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