A survey by RBC Dexia Investment Services says that global markets bounced back during the September quarter, boosting Canadian pension fund investments by a solid 4.7 percent over the period.
“Despite a bumpy ride in the June quarter, pension funds have earned 5.5 percent year-to-date – a respectable return and comfortably above inflation,” says Don McDougall, the Director of Advisory Services at RBC Dexia Investor Services.
Within the USD 340 billion universe, all asset classes produced favourable results, benefiting from encouraging economic news and a stable Canadian dollar in the three months ending 30 September. Global equities were top-performers in the quarter, rising 5.3 percent in Canadian dollar terms. According to the RBC Dexia survey, Canadian pension funds have outpaced the MSCI World Index over the last quarter and year-to-date.
Domestic bonds posted the best quarterly performance in three years: the median Canadian pension plan earned 4.9 percent, matching the Scotia Capital Universe Bond Index. Moreover, long bonds (maturities of ten years or more), jumped 8.3 percent – a 15-year high.
Sliding crude oil prices dampened the Canadian equity market and the energy-heavy S&P TSX Composite Index rose only 1.9 percent for the quarter.