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Modest returns for Canadian Defined Benefit Pension Plans in Q3 2019: RBC Investor & Treasury Services

Market signals a slowdown of global economic growth and calls for defensive investment strategies

TORONTO, November 5, 2019 - Canadian defined benefit pension plans returned 1.7 per cent (based on the median return) in Q3 2019, down -1 per cent from Q2 2019 returns, according to the RBC Investor & Treasury Services All Plan Universe.

Additional results

  • TSX Composite Index returned 2.5 per cent (marginally down by -0.1 percent from Q2). Overall, nine of the 11 sectors posted positive returns, with Utilities and Real Estate taking the lead. Canadian equities also returned 2.5 per cent in Q3, up from Q2 returns of 2.3 per cent.
  • The FTSE TMX Canada Universe returned 1.2%, as Canadian bond yields also continued to drop in step with global bonds, resulting in longer-term bonds outperforming their shorter-term counterparts. Canadian Fixed Income investments returned 1.9 per cent (-1.8 percent down from Q2).
  • The MSCI World Index made slight gains to 1.9 per cent (up +0.1 per cent over Q2). Global equities declined quarter over quarter, returning 0.8 per cent in Q3, down from the Q2 return of 1.8 per cent.

Quote
“While markets remain volatile, the ongoing trade tensions between the U.S. and China, in addition to the geopolitical turbulence surrounding Brexit, continue to propel very modest pension plan returns. Plan sponsors are encouraged to consider taking a defensive approach to lower investment risks, such as moving into private assets, blue chips and other relatively safe investments with stable track records.”

- Ryan Silva, Director, Client Coverage, RBC Investor & Treasury Services

Historic performance


Period

Return (%)

Period

Return (%)

Q3 2019

1.7

Q4 2017

4.4

Q2 2019

2.7

Q3 2017

0.4

Q1 2019

7.2

Q2 2017

1.4

Q4 2018

-3.5

Q1 2017

2.9

Q3 2018

0.1

Q4 2016

0.5

Q2 2018

2.2

Q3 2016

4.2

Q1 2018

0.2

Q2 2016

2.9

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 a cross-section of 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 and market services for financial and other institutional investors worldwide, with over 4,500 employees in 17 countries across North America, Europe, Asia and Australia. We deliver services which safeguard client assets, underpinned by client-centric digital solutions which continue to be enhanced and evolved in line with our clients’ changing needs. Trusted with CAD 4.2 trillion in client assets under administration, RBC I&TS has been rated by our clients as the #1 global custodian for eight consecutive years and is a financially strong partner with among the highest credit ratings globally.

About RBC
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For more information, please contact:
Ylana Kurtz, +1 416 348 2330, ylana.kurtz@rbc.com


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 Services operates through the following primary operating 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.

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