Canadian pension funds see Q1 returns drop-off
11 May 2016 Toronto
Image: Shutterstock
Canadian pension funds suffered a 0.03 percent fall in defined benefits pension plans’ returns in Q1 2016, according to RBC Investor & Treasury Services All Plan Universe.
The marginal losses represent a stall in the market that was only just coming off a two-quarter losing streak with 3.1 percent returns in Q4 2015.
A positive annual return for 2015 was only salvaged by abnormally strong Q1 2015 results of 6.6 percent, the largest quarterly return recorded by RBC in the past six years.
RBC cited global market volatility for the negative returns as equities wiped out most of their Q4 2015 gains of 8.9 percent with a 6.2 drop-off in Q1 2016.
Data provided by the RBC All Plan Universe noted that Canadian equities managed to buck the global trend, posting positive Q1 2016 returns of 4.6 percent, reversing their 0.5 percent losses from Q4 2015.
“Global uncertainty created a volatile start to the year for markets around the world before stabilising somewhat as the year progressed,” said David Heisz, CEO of RBC Investor Services Trust.
“The TSX Composite Index posted a 4.5 percent gain in Q1 after one of the worst starts to a year, while commodities, particularly gold and oil, ended the quarter on a strong run and boosted the performance of Canadian companies in the energy and materials sectors.”
Craig Wright, senior vice president and chief economist at RBC, added: “Concerns with respect to the Chinese economy, commodity prices and central bank actions nudged markets in a negative direction before anxiety eased and markets rebounded in mid-February. Meanwhile, economic data during this period pointed to the global economy experiencing modest growth.”
The marginal losses represent a stall in the market that was only just coming off a two-quarter losing streak with 3.1 percent returns in Q4 2015.
A positive annual return for 2015 was only salvaged by abnormally strong Q1 2015 results of 6.6 percent, the largest quarterly return recorded by RBC in the past six years.
RBC cited global market volatility for the negative returns as equities wiped out most of their Q4 2015 gains of 8.9 percent with a 6.2 drop-off in Q1 2016.
Data provided by the RBC All Plan Universe noted that Canadian equities managed to buck the global trend, posting positive Q1 2016 returns of 4.6 percent, reversing their 0.5 percent losses from Q4 2015.
“Global uncertainty created a volatile start to the year for markets around the world before stabilising somewhat as the year progressed,” said David Heisz, CEO of RBC Investor Services Trust.
“The TSX Composite Index posted a 4.5 percent gain in Q1 after one of the worst starts to a year, while commodities, particularly gold and oil, ended the quarter on a strong run and boosted the performance of Canadian companies in the energy and materials sectors.”
Craig Wright, senior vice president and chief economist at RBC, added: “Concerns with respect to the Chinese economy, commodity prices and central bank actions nudged markets in a negative direction before anxiety eased and markets rebounded in mid-February. Meanwhile, economic data during this period pointed to the global economy experiencing modest growth.”
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