TORONTO, April 25, 2013 /CNW/ - Resurgent global stock markets continued to lift pension assets in the first quarter, according to the latest survey from RBC Investor Services, part of Royal Bank of Canada's (RY on TSX and NYSE) Investor & Treasury Services segment.
Within the $460 billion RBC Investor & Treasury Services All Plan universe - the industry's most comprehensive universe of Canadian pension plans - Defined benefit (DB) pensions earned 4.4 per cent in the quarter ending March 31, 2013, bringing 12-month results to 9.4 per cent. "On the back of optimism over the U.S. recovery, and central bank commitments to maintain loose monetary policies, investors built on last fall's run, helping pension plans to maintain momentum," said Scott MacDonald, Head, Pensions, Insurance, and Sovereign Wealth Strategy for RBC Investor & Treasury Services.
Global Equities continued to be the top performing asset class as pension plans kept pace with the MSCI World Index, gaining 10.0 per cent for the quarter. "Strength came primarily from the U.S. market which set new highs, but also from Japanese stocks, up in excess of 20 per cent in local currency terms. Pensions did well to match the World benchmark, as most were under exposed to the U.S. market," noted MacDonald.
Canadian equity markets also contributed to pension performance as the S&P/TSX Composite rose 3.3 per cent in the quarter. "Advances were fairly broad but weakness in mining stocks drove the heavily weighted materials sector down 10.4 per cent. However, most pension plans were under exposed and subsequently outperformed the index by 1.4 per cent for the quarter," said MacDonald.
Bonds generated lacklustre returns as longer duration maturities were affected early in the quarter. Added MacDonald: "With recent events in Cyprus spooking some investors back to the bond market, Canadian pension plans earned 0.6 per cent over the last three months in their fixed income allocation."
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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Image with caption: "Canadian Defined Benefit Pensions Universe, median returns as at March 31st (CNW Group/RBC Investor Services)". Image available at: http://photos.newswire.ca/images/download/20130425_C8476_PHOTO_EN_25983.jpg
SOURCE: RBC Investor Services
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