TORONTO, April 20 /CNW/ - Healthy stock market returns helped pension
plans maintain momentum in the March quarter but inflation jitters and
a stronger loonie dampened their gains, according to a survey just
released by RBC Dexia Investor Services, which maintains the industry's
most comprehensive universe of Canadian pension plans and money
Within the $340 billion RBC Dexia universe, pension assets earned 2.3
per cent in the quarter ending March, bringing 12-month results to 10.8
per cent. "Equities continued to do well despite the geopolitical
tensions in the Middle East and the tragic events in Japan, but have
been exceedingly volatile," said Don McDougall, Director of Advisory
Services for RBC Dexia.
Canadian stocks were the top performing asset class for a third
successive quarter as the S&P TSX Composite index gained 5.6 per cent.
"The two largest sectors, financials (up 9.1 per cent) and energy (up
8.7 per cent) accounted for the bulk of the increase, but pensions were
generally under-exposed to both and subsequently lagged the index by
0.3 per cent," noted McDougall. "Over the year, pensions are up a solid
19.0 per cent but trail the S&P TSX benchmark by 1.4 per cent."
Foreign equities also contributed but currency losses on US and Japanese
assets muted their gains. In the quarter, the MSCI World index
appreciated 3.6 per cent in local currency terms but pensions only rose
2.6 per cent once converted to Canadian dollars. Year-over-year,
currencies had less impact on performance as the loonie's strength in
relation to the US dollar was more than offset by it's weakness against
the other major currencies.
Canadian pension plans saw their bond holdings lose 0.2 per cent for the
first three months of 2011, as price declines outpaced coupon payments
for a second successive quarter. McDougall added, "With mounting
speculation over higher inflation, weakness came from the longer end of
the curve as long-term bonds declined by 1.4 per cent versus 0.3 per
cent for the DEX Universe."
About RBC Dexia Investor Services
RBC Dexia Investor Services offers a complete range of investor services
to institutions worldwide. Our unique offshore and onshore solutions,
combined with the expertise of our 5,400 professionals in 15 markets,
help clients grow their business and sustain enhanced performance
through efficiency improvements and robust risk management practices.
Equally owned by RBC and Dexia, the company ranks among the world's top
10 global custodians with USD 2.8 trillion in client assets under
RBC Dexia Investor Services Limited is a holding company that provides
strategic direction and management oversight to its affiliates,
including RBC Dexia Investor Services Bank S.A., a credit institution
licensed in Luxembourg by the Commission de Surveillance du Secteur
Financier and the Ministry of Finance. All are licensed users of the
RBC trademark (a registered trademark of Royal Bank of Canada) and
Dexia trademark (a registered mark of Dexia Crédit Local) and conduct
their global custody and investment administration business under the
RBC Dexia Investor Services brand name.
SOURCE RBC Dexia Investor Services
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