Canadian pensions recoup some ground in second quarter

    TORONTO, July 18 /CNW/ - Soaring energy stocks lifted Canadian pension
plans into positive territory in the second quarter despite lingering global
credit concerns, 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 CAD 340 billion RBC Dexia universe, Canadian pension funds
earned 1.0 per cent in the quarter ended June 30, trimming six month losses to
1.0 per cent. "Albeit modest, after posting three consecutive negative
quarters, it's a welcome reprieve, especially considering the weakness in
other global markets," said Don McDougall, Director of Advisory Services for
RBC Dexia.
    Canada's energy rich equity market continued to buck the worldwide trend
as high-flying oil prices made the S&P TSX Composite Index one of the best
performers in the world - up a whopping 9.1 per cent for the quarter. Energy
stocks were up 22.9 per cent for the quarter, accounting for more than three
quarters of the gain, while one individual stock - Potash Corporation of
Saskatchewan - accounted for most of the rest. "Unfortunately, with advances
so narrowly focussed, Canadian pensions had a difficult time keeping pace and
underperformed the composite benchmark by 0.9 per cent this quarter - and by
3.0 per cent over the year-to-date," observed McDougall.
    Global stocks continued to be the worst-performing asset class, slipping
3.4 per cent in the quarter while underperforming the MSCI World Index by
0.6 per cent. "In local currency terms, the index has plunged 12.8 per cent
since the beginning of the year, but pension plans have lost only 9.0 per cent
once exchange rates are taken into account," noted McDougall.
    Canadian pension plans also saw their fixed income holdings lose 0.3 per
cent over the quarter, as mounting speculation over inflation kept domestic
bonds in the red throughout the period but managed to outperform the DEX
Universe Bond Index by 0.4 per cent. "Fortunately for those holding real
return bonds, they unsurprisingly flourished in this type of environment,
gaining an impressive 10.7 per cent over six months," said McDougall.

    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 4,800 professionals in 15 markets, help clients grow
their business and sustain enhanced performance through efficiency
improvements and robust risk management processes. Equally-owned by RBC and
Dexia, the company ranks among the world's top 10 global custodians with
USD 2.9 trillion in client assets under administration.

For further information:

For further information: Warren Weeks, RBC Dexia Investor Services,
Toronto, (416) 955-7048

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