TORONTO, October 28, 2013 - Resilient global equity markets helped lift Canadian pension plans back into positive territory during the third quarter according to the latest quarterly survey from RBC Investor & Treasury Services.
According to the $460 billion RBC Investor & Treasury Services All Plan universe - the industry's most comprehensive universe of Canadian pension plans - defined benefit (DB) pension assets rose 3.6 per cent during the three months ending September 30, 2013, bringing year-to-date totals to 7.9 per cent.
"Improving economic data from Europe and China helped spark global stocks," said Scott MacDonald, Head, Pension Segment Development for RBC Investor & Treasury Services. "But continued speculation over Fed tapering and the looming US fiscal impasse kept financial markets volatile."
Canadian stocks rebounded from June's low, gaining 6.9 per cent while exceeding the S&P/TSX Composite index by 0.7 per cent during the quarter. "Advances were broad across nine of the ten sectors with only the lightly weighted utilities sector posting negative numbers," said MacDonald. "Year-to date, Canadian equity holdings are up 10.2 per cent - considerably ahead of the index by 4.9 per cent. Value added came mainly from an under-exposure to the heavily weighted materials sector, with gold stocks in particular down 38.0 per cent for the period."
Foreign equities moved higher for the fifth successive quarter, advancing 5.7 per cent against 5.4 per cent for the MSCI World Index. "Strength was widespread across all global regions with Europe leading the way," added MacDonald.
Year-to-date, foreign stocks continue to be the top performing asset class as pension plans kept pace with the global benchmark, up 21.1 per cent. "Canadian dollar weakness against most major currencies helped boost returns by over 2.2 per cent for the nine month period," added MacDonald.
Bonds continued to show weakness as Canadian plans saw their holdings gain only 0.1 per cent in the last three months as DEX Universe Bond Index yields increased for a third straight quarter. Year-to-date, bond holdings declined 1.7 per cent while the DEX Long Term index lost 5.9 per cent and DEX Real Return Bonds are down 11.4 per cent.
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RBC Investor & Treasury Services (RBC I&TS) is a specialist provider of asset servicing, custody, payments and treasury services for financial and other institutional investors worldwide. We serve clients from 18 locations across North America, Europe and the Asia Pacific region. We deliver custodial, advisory, financing and other services to safeguard clients' assets, maximize liquidity and manage risk in multiple jurisdictions. RBC I&TS is ranked among the world's top 10 global custodians, with USD 3.1 trillion (CAD 3.1 trillion) in client assets under administration (as at April 30 2013).
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