RBC Dexia survey: Canadian pensions gain ground in first quarter

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 managers.

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 administration.

www.rbcdexia.com                     Join our LinkedIn group                     Follow us on Twitter

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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Jason Graham                               Raphael Mazet
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jason.graham@rbcdexia.com                               raphael.mazet@rbcdexia.com


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