TORONTO, Jan. 21 /CNW/ -Strength in Canadian equities have helped
Canadian pension plans surge ahead of their pre-financial crisis levels
of 2008, 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 4.3
per cent in the quarter ending December 2010, improving the full year
performance to 10.4 per cent, making this a second consecutive year of
double digit returns.
Despite the volatility in the global markets during the past ten years,
Canadian pension plans have achieved an average annualized return of
5.4 per cent. "What the last decade has taught us is that
diversification and disciplined investing is key over the long run,"
noted Fay Coroneos, Global Head of Risk & Investment Analytics for RBC
Canadian equity markets flourished as nine out of ten TSX sectors
experienced double digit annual gains. Even though Canadian Pension
plans underperformed the index by 0.4, "it was encouraging to see
strong returns not only in energy and materials but also in industrials
and the consumer discretionary sectors" added Coroneos.
Foreign equities increased 6.3 per cent over one year. "Returns were
muted by the soaring loonie, which gained significantly against the US
dollar and was one of the best performers among major world
currencies," reported Coroneos. The MSCI World index in local currency
increased 10.0 per cent for the year, but was reduced to 5.9 per cent
when translated into Canadian dollars.
For the year, domestic bond holdings within Canadian pension plans
advanced 7.8 per cent, surpassing the DEX Universe index by 1.1 per
cent. "Long-term bonds, with maturity of over ten years, continue to
dominate short-term and mid-term bonds in 2010," said Coroneos. "The
growing focus on asset-liability matching has resulted in pension plans
shifting into the longer end of the yield spectrum, increasing demand
for long-term bonds. In light of this, we believe a governance
structure which includes the use of a liability-based benchmark will be
of great interest for pension plans in 2011."
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 5,300 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 2.7 trillion in client assets under
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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