Market turbulence batters Canadian pensions

    TORONTO, Oct. 17 /CNW/ - Plummeting equity markets hurt pension plans in
the third quarter as the ongoing financial crisis gained global intensity,
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 plans
suffered the largest quarterly decline in a decade, tumbling 8.6 per cent in
the three months ending September 30. "Year-to-date, Canadian pensions are
down 10.1 per cent," noted Don McDougall, Director of Advisory Services for
RBC Dexia. "It hasn't been pretty - and judging by the performance in October
so far, the situation is not getting any better."
    Canadian equity was the hardest-hit asset class, plunging 18.2 per cent
as commodity prices dragged the resource-heavy S&P TSX Composite Index to its
lowest quarterly result since September of 1998. Energy stocks lost 28.3 per
cent, while materials dropped 33.6 per cent over the period. "Fortunately,
most Canadian funds had already trimmed their exposure to resources,"
McDougall explained. "By locking in gains earlier in the year, pensions deftly
outperformed the index by 1.7 per cent."
    Global equities fell 11.2 per cent, matching the MSCI World Index in the
latest quarter. "Ironically, US stocks and a stronger greenback helped cushion
the blow," said McDougall. In Canadian dollar terms, the MSCI EAFE index
slumped by 16.8% over the quarter, an 18-year record drop.
    In domestic bonds, Canadian pensions slipped 1.5 per cent in the quarter
- far below the 0.4 per cent dip in the DEX Universe broad market benchmark.
McDougall observed, "Spreads varied considerably: longer maturity bonds
dropped 3.1 per cent, while real return bonds lost 9.0 per cent - their worst
quarter in 14 years."

    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 5,200 professionals in 16 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 2.8 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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