Q1 2017 returns of 2.9 per cent build on
strong close to 2016
TORONTO, May 15, 2017 /CNW/ - Building on a strong
2016 annual return of 6.8 per cent, Canadian defined benefit
pension plans upheld the positive growth trend with Q1 2017 returns
of 2.9 per cent, according to the $650
billion RBC Investor & Treasury Services All Plan
Universe, the industry's most comprehensive universe of Canadian
pension plans. This marks the fourth straight quarter of growth for
Canadian pension plans.
"Canadian pension plan returns, led by strength in Canadian and
global equities, are off to a good start in 2017; however vigilance
is still required," said James
Rausch, Head of Client Coverage, Canada, RBC Investor & Treasury Services.
"While ongoing business investment in Canada could spur growth, asset managers will
undoubtedly be focusing on maintaining a diversified portfolio and
actively managing their risk exposure in the period ahead given
evolving macro-economic and political forces around the world."
Positive global economic conditions in Q1 2017 helped lift
global equities in delivering a return of 6.2 per cent, up from 3.0
per cent in Q4 2016. The MSCI World Index reflected a similar
trend, returning 5.8 per cent for Q1 2017, up from 3.9 per cent in
Q4 2016.
Canadian equity returns retreated slightly quarter-over-quarter,
returning 2.3 percent in Q1 2017, down from 5.7 per cent in Q4
2016. The TSX Composite Index followed a similar course, gaining
2.4 per cent in Q1 2017 yet down from 4.5 per cent in Q1 2016,
primarily due to weakness in the energy sector at the beginning of
the year.
Canadian fixed income assets rebounded in Q1 2017, posting a
return of 1.4 per cent, compared to a Q4 2016 loss of -3.4 per
cent. The FTSE TMX Universe Canadian bond index also returned to
positive territory, posting a Q1 2017 gain of 1.2 per cent. The
Index declined by 3.4 per cent in Q4 2016. The Canadian bond market
remained stable against a number of national and international
events, including the delivery of the Canadian federal budget, a
U.S. interest rate hike and continuing Brexit developments.
The foreign exchange market saw the U.S. dollar depreciate
against the Canadian dollar in Q1 2017, losing -0.6 per cent
compared to a Q4 2016 gain of 2.0 per cent. Federal Reserve rate
hikes and the cautious views of the Bank of Canada may continue to impact the currency
pair.
HISTORIC PERFORMANCE
Period
|
Return
(%)
|
Period
|
Return
(%)
|
Q1
2017
|
2.9
|
Q4 2014
|
2.7
|
Q4
2016
|
0.5
|
Q3 2014
|
1.1
|
Q3
2016
|
4.2
|
Q2 2014
|
3.0
|
Q2
2016
|
2.9
|
Q1 2014
|
4.8
|
Q1
2016
|
0.0
|
Q4 2013
|
6.1
|
Q4
2015
|
3.1
|
Q3 2013
|
3.6
|
Q3
2015
|
-2.0
|
Q2 2013
|
0.0
|
Q2
2015
|
-1.6
|
Q1 2013
|
4.4
|
Q1
2015
|
6.6
|
Q4 2012
|
2.5
|
About the RBC Investor & Treasury Services All Plan
Universe
For the past 30 years, RBC Investor & Treasury
Services (RBC I&TS) has managed one of the industry's largest
and most comprehensive universes of Canadian pension plans. The
"All Plan Universe" currently tracks the performance and asset
allocation of over $650 billion in
assets under management across Canadian defined benefit (DB)
pension plans, and is a widely-recognized performance benchmark
indicator. The RBC Investor & Treasury Services "All Plan
Universe" is produced by RBC I&TS' Risk & Investment
Analytics (R&IA) service. R&IA work in partnership with
best-in-class technology to deliver independent and cost effective
solutions designed to help institutional investor clients monitor
investment decisions, optimize performance, reduce costs, mitigate
risk and increase governance capability.
About RBC Investor & Treasury Services
RBC
Investor & Treasury Services (RBC I&TS) is a specialist
provider of asset services, custody, payments and treasury services
for financial and other institutional investors worldwide. We serve
clients from 19 countries across North
America, Europe,
Asia and Australia, delivering services to safeguard
client assets and maximize liquidity. Rated by our clients as the
#1 global custodian for six consecutive years (Global Custody
Survey, Global Investor ISF, 2011 to 2016), RBC I&TS is trusted
with CAD 3.8 trillion in client
assets under administration as at January
31, 2017.
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SOURCE RBC Investor & Treasury Services