Canadian pension funds bank record returns in 2019
23 April 2020 Canada
Image: Oko Laa/Shutterstock.com
Data from RBC Investor and Treasury Services’ (RBC I&TS) All Plan Universe shows that Canadian defined benefit pension plans achieved their second-highest annual return in more than a decade due to an upsurge in Canadian and global equity markets.
According to RBC I&TS, the pension plans returned 14 percent in 2019, including a 2 percent return in Q4 and 1.7 percent in Q3.
Canadian equities value increased 3.1 percent in Q4 and were up 4 percent for the year, while global equities returned 6.8 percent in Q4, contributing to a 20.7 percent uptick for the year.
Meanwhile, Canadian bonds decreased 1.6 percent in the final quarter of 2019 but were up 10.3 per cent for the year.
Commenting on the latest data, RBC’s head of asset servicing David Linds, says: “Over the past 10 years, the average Canadian defined benefits plan has generated an annualised return of 8 percent on its assets. These results are quite impressive, though we can’t discount the impact of global uncertainty and trade tensions in the years ahead.
“While the performance of equity markets suggests that investors expect to see continued growth, plan sponsors need to continue building robust strategies to prepare for higher volatility as earnings and fundamentals begin to slow.”
According to RBC I&TS, the pension plans returned 14 percent in 2019, including a 2 percent return in Q4 and 1.7 percent in Q3.
Canadian equities value increased 3.1 percent in Q4 and were up 4 percent for the year, while global equities returned 6.8 percent in Q4, contributing to a 20.7 percent uptick for the year.
Meanwhile, Canadian bonds decreased 1.6 percent in the final quarter of 2019 but were up 10.3 per cent for the year.
Commenting on the latest data, RBC’s head of asset servicing David Linds, says: “Over the past 10 years, the average Canadian defined benefits plan has generated an annualised return of 8 percent on its assets. These results are quite impressive, though we can’t discount the impact of global uncertainty and trade tensions in the years ahead.
“While the performance of equity markets suggests that investors expect to see continued growth, plan sponsors need to continue building robust strategies to prepare for higher volatility as earnings and fundamentals begin to slow.”
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