TORONTO, April 19 /CNW/ - Bolstered by yet another quarter of healthy
equity returns, Canadian pension funds maintained their positive momentum
during the first quarter, according to a report by RBC Dexia Investor
Services, which maintains the industry's most comprehensive universe of
Canadian pension plans and money managers.
Within the CAD 340 billion RBC Dexia universe, pension funds earned
1.8 per cent in the quarter ended March 31, 2007. "On the heels of two very
strong back-to-back quarters, this is a fairly respectable start to the new
year," noted Don McDougall, Director of Advisory Services, RBC Dexia.
"Since hitting their low-point in March of 2003, pensions have benefited
from impressive equity numbers and consequently, have performed extremely
well," added McDougall. "The median Canadian plan has realized a healthy
14.1 per cent annualized return over the past four years." In the past 12
months, performance averaged 10.8 per cent.
Canadian equities were the dominant asset class over the four-year
period, generating a whopping 23.7 per cent annualized gain and outpacing the
S&P TSX Composite by 1.3 per cent. Domestic equities continued to fare well in
the first quarter of 2007, climbing 3.4 per cent and lifting their one-year
performance to 14.1 per cent.
Foreign stocks also did their part, pushing the four-year MSCI World
Index to 14.2 per cent in Canadian dollar terms. Moreover, by limiting
exposure to the underperforming US market, Canadian pensions outpaced the
industry benchmark by more than a full percentage point, gaining 15.4 per cent
for the period. Over the past 12 months, performance was a solid
14.7 per cent.
Domestic bonds continued to post lacklustre results in Q1. The median
pension fund earned 0.9 per cent for the quarter, matching the Scotia Capital
Universe Bond Index. Over the past four years, however, Canadian plans have
averaged a more impressive 6.7 per cent return on fixed income.
About RBC Dexia Investor Services
RBC Dexia Investor Services offers a complete range of investor services
to institutions worldwide. Established in January 2006, we are a joint venture
equally owned by Royal Bank of Canada and Dexia. We rank among the world's top
10 global custodians, with USD 2.3 trillion in client assets under
administration. Our innovative products and services help clients maximize
operational efficiency, minimize risk and enhance portfolio returns. And our
more than 4,300 professionals in 15 markets offer proven expertise to enhance
clients' business performance.
For further information:
For further information: Warren Weeks, RBC Dexia Investor Services,
Toronto, (416) 955-7048