Scott MacDonald, RBC Investor Services, comments on 2012 fourth quarter and annual Canadian pension performance.
TORONTO, Jan. 29, 2013 /CNW/ - Global equity and real estate returns
boosted Canadian pension plans despite fourth quarter volatility,
according to the latest survey from RBC Investor Services, part of
Royal Bank of Canada's (RY on TSX and NYSE) Investor & Treasury
Within the $410 billion RBC Investor & Treasury Services All Plan
universe - the industry's most comprehensive universe of Canadian
pension plans - Canadian defined benefit (DB) pensions gained 2.5 per
cent in the quarter ending December 31, 2012, compared to 3.2 per cent
in the third quarter. The median 2012 return for Canadian DB plans was
9.4 per cent.
"With overall 2012 returns approaching double digits, Canadian defined
benefit pension plans were able to breathe a little easier even with
only modest returns in the fourth quarter," said Scott MacDonald, Head,
Pensions, Insurance, and Sovereign Wealth Strategy for RBC Investor
Services. "Continued stimulus by central banks in Europe, Japan and the
U.S. offered hope for the global economy, while here in Canada lower
global demand for commodities dampened Canadian equity returns. Despite
this weakness, other contributing sectors finished the year strong,
helping Canadian equity performance for the quarter to remain
Canadian equities returned 1.7 per cent in the fourth quarter, bringing
full year S&P/TSX performance up to 7.2 per cent. Eight out of 10
sectors in the S&P/TSX Composite had positive gains in the fourth
quarter, with consumer staples and information technology up 9.2 per
cent and 7.3 per cent respectively. Financials continued to be a
primary Canadian equity driver as the sector rose 6.3 per cent in the
quarter, ending the year up 17.6 per cent.
Canadian pensions' Canadian equity holdings returned 3.1 per cent for
the quarter, outperforming the S&P/TSX Composite by 1.4 per cent as
they were underweight in materials and slightly overweight in consumer
staples and information technology.
Despite concerns over the European crisis, the U.S. election and
weakening corporate earnings growth, Canadian dollar returns for the
MSCI World was 3.7% for the quarter and 13.3 per cent on the year.
Canadian Pensions outperformed the benchmark MSCI World index by 0.8
per cent in the fourth quarter and 1.4 per cent for 2012.
The real estate asset class also gave Canadian pensions a lift,
delivering double digit returns in 2012.
Canadian DB plans matched the benchmark DEX Universe Bond Index,
returning 0.3 per cent for the fourth quarter but were able to
outperform the benchmark on the year by 0.9 per cent.
Added MacDonald: "Within the DEX Universe index, the corporate segment
continued to outperform the government segment as managers were
confident enough to take on additional risk for the potential yield."
About RBC Investor & Treasury Services
RBC Investor & Treasury Services, part of Royal Bank of Canada (RY on
TSX and NYSE), is a specialist provider of custody, payments
and treasury services for financial and other institutional investors
worldwide. The Investor & Treasury Services segment is comprised of
three businesses: Global Financial Institutions, Investor Services and
Treasury Services. Active in 15 markets globally, RBC Investor &
Treasury Services provides custodial, advisory, financing and other
services to safeguard clients' assets, maximize liquidity and manage
risk in multiple jurisdictions. RBC Investor & Treasury Services is
ranked among the world's top 10 global custodians, with USD 2.9
trillion (CAD 2.8 trillion) in client assets under administration.
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Video with caption: "Scott MacDonald, RBC Investor Services, comments on
2012 fourth quarter and annual Canadian pension performance.
". Video available at: http://stream1.newswire.ca/cgi-bin/playback.cgi?file=20130129_C9267_VIDEO_EN_23084.mp4&posterurl=http://photos.newswire.ca/images/20130129_C9267_PHOTO_EN_23084.jpg&clientName=RBC%20Investor%20Services&caption=Scott%20MacDonald%2C%20RBC%20Investor%20Services%2C%20comments%20on%0D%0A2012%20fourth%20quarter%20and%20annual%20Canadian%20pension%20performance%2E%0D%0A%0D%0A&title=RBC%20INVESTOR%20SERVICES%20%2D%20RBC%20Investor%20%26%20Treasury%20Services%20Survey%3A%20Equity%20Returns%20Propel%20Canadian%20Pensions%20in%202012&headline=RBC%20Investor%20%26%20Treasury%20Services%20Survey%3A%20Equity%20Returns%20Propel%20Canadian%20Pensions%20in%202012
Image with caption: "Canadian Defined Benefit Pensions Universe, Median returns as at December 31, 2012 (CNW Group/RBC Investor Services)". Image available at: http://photos.newswire.ca/images/download/20130129_C9267_PHOTO_EN_23083.jpg
SOURCE: RBC Investor Services
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