Canadian DB pensions gain as equities rebound

The second quarter saw energy firms report strong results, boosting Canadian equities by 6.8% and helping defined pension funds post a mild uptick.

The rise in equities reversed the 4.5% decline for the TSX Composite Index in the first quarter of 2018 and meant a 2.2% boost for DB pension funds compared to their 0.2% loss in Q1.

The figures from RBC Investor & Treasury Services also show that global equities returned 2.6%, up from Q1 2018 return of 2% despite concerns over trade wars and central banks unwinding of stimulus.

The fixed income market saw almost no change from the first quarter, with a 0.6% return compared to 0.1% in Q1. This was due to pressure on the markets from escalating tensions with the U.S., the impact of taxing imports and the volatility associated with policy.

No time for complacency
The positive results for the TSX in the second quarter came amid volatility and Ryan Silva, Director, Head of Pension and Insurance Segments, Global Client Coverage RBC Investor & Treasury Services says asset managers shouldn’t be complacent.

“As we head into the second half of the year, asset managers must remain vigilant. NAFTA trade tensions, U.S. – China trade friction and ongoing geopolitical issues will continue to reverberate through the markets, forcing asset managers to remain attentive to the ongoing volatility and its impact on portfolios and risk exposure,” he said.

HISTORIC PERFORMANCE