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Canadian pensions deliver second consecutive quarter of positive returns in Q3: RBC Investor & Treasury Services

 

Global and Canadian equities continue to generate solid returns

 

TORONTO, November 3, 2016 - Canadian defined benefit pension plans remained in positive territory in Q3 2016, according to the $650 billion RBC Investor & Treasury Services All Plan Universe, the industry’s most comprehensive universe of Canadian pension plans. The plans returned 4.2 per cent in Q3 2016, up from Q2 returns of 2.9 per cent, and returns are up 7.3 per cent year-to-date.

Global equities and Canadian equities continued their winning ways in Q3 2016. Global equities returned 6.7 per cent, compared with 1.6 per cent in Q2 2016, and are up 1.8 per cent year-to-date. Canadian equities also returned 6.7 per cent in Q3 2016, compared to 4.0 per cent a quarter earlier, and are up 15.9 per cent year-to-date. This represents a notable turnaround from a year ago when global equities posted a loss of -2.2 per cent in Q3 2015 while Canadian equities posted a -7.8 per cent loss in the same quarter of 2015, primarily due to weakness in the materials and energy sectors.

Domestic bonds continue to be a source of steady returns for Canadian plans, returning 1.6 per cent in Q3 and 6.2 per cent year-to-date. With the persistence of the low-interest rate environment, long duration bonds have been the best performing fixed income segment, with the benchmark FTSE TMX Canada Long Overall index returning 2.4 per cent in Q3 and 12.6 per cent year-to-date.

“Canadian pension plans continue to post improved quarter-over-quarter returns this year,” said James Rausch Head of Client Coverage, Canada and Global Head of Transaction Banking - Banks, Brokers & Exchanges, RBC Investor & Treasury Services. “The resources, materials and energy sectors continued to fuel the gains in Canadian equities, while global markets adapted to the post UK referendum landscape and emerging economies realized gains. Global volatility remains a reality as several markets, including China, experience anemic growth despite low or negative interest rate policies. Managing risk will remain a priority for the remainder of 2016.”

ADDITIONAL INFORMATION

  • Canadian equity returns of 6.7 per cent outperformed the TSX Composite Index returns of 5.5 per cent in Q3. 15.9 per cent versus 15.8 per cent year-to-date.
  • Global equity returns of 6.7 per cent outpaced the MSCI World Index returns of 6.1 per cent in Q3. 1.8 per cent versus -0.1 per cent year-to-date.
  • Canadian fixed income returns of 1.6 per cent outperformed the FTSE TMX Universe Canadian bond index returns of 1.2 per cent in Q3. 6.2 per cent versus 5.3 per cent year-to-date.

HISTORIC PERFORMANCE

Period

Return (%)

Period

Return (%)

Q3 2016

4.2

Q3 2014

1.1

Q2 2016

2.9

Q2 2014

3.0

Q1 2016

0.0

Q1 2014

4.8

Q4 2015

3.1

Q4 2013

6.1

Q3 2015

-2.0

Q3 2013

3.6

Q2 2015

-1.6

Q2 2013

0.0

Q1 2015

6.6

Q1 2013

4.4

Q4 2014

2.7

Q4 2012

2.5


About the RBC Investor & Treasury Services All Plan Universe
For the past 30 years, RBC Investor & Treasury Services (RBC I&TS) has managed one of the industry’s largest and most comprehensive universes of Canadian pension plans. The “All Plan Universe” currently tracks the performance and asset allocation of over $650 billion in assets under management across Canadian defined benefit (DB) pension plans, and is a widely-recognized performance benchmark indicator. The RBC Investor & Treasury Services “All Plan Universe” is produced by RBC I&TS’ Risk & Investment Analytics (R&IA) service. R&IA work in partnership with best-in-class technology to deliver independent and cost effective solutions designed to help institutional investor clients monitor investment decisions, optimize performance, reduce costs, mitigate risk and increase governance capability.

About RBC Investor & Treasury Services
RBC Investor & Treasury Services (RBC I&TS) is a specialist provider of asset services, custody, payments and treasury services for financial and other institutional investors worldwide. We serve clients from 20 countries across North America, Europe, Asia and Australia, delivering services to safeguard client assets and maximize liquidity. Rated by our clients as the #1 global custodian for six consecutive years (Global Custody Survey, Global Investor ISF, 2011 to 2016), RBC I&TS is trusted with over USD 3 trillion in client assets under administration (as at July 31, 2016).

About RBC
Royal Bank of Canada is Canada’s largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America’s leading diversified financial services companies, and provide personal and commercial banking, wealth management, insurance, investor services and capital markets products and services on a global basis. We have over 80,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 36 other countries. For more information, please visit rbc.com.‎

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For more information, contact:

Briana D’Archi, +1 416-955-5658

Adam Lister, +44 (0)20 7653 4978


RBC Investor & Treasury Services™ is a global brand name and is part of Royal Bank of Canada. RBC Investor & Treasury Services is a specialist provider of asset servicing, custody, payments and treasury services for financial and other institutional investors worldwide. RBC Investor & Treasury Services operates primarily through the following companies: Royal Bank of Canada, RBC Investor Services Trust and RBC Investor Services Bank S.A., and their branches and affiliates. These materials are provided by RBC Investor & Treasury Services (RBC I&TS) for general information purposes only.

RBC I&TS makes no representation or warranties and accepts no responsibility or liability of any kind for their accuracy, reliability or completeness or for any action taken, or results obtained, from the use of the materials. Readers should be aware that the content of these materials should not be regarded as legal, accounting, investment, financial, or other professional advice, nor is it intended for such use. ® / ™ Trademarks of Royal Bank of Canada. Used under licence.