TORONTO, Oct. 29, 2020 /CNW/ - As economies reopened,
Canadian DB pensions in the RBC Investor & Treasury Services
All Plan Universe weathered the pandemic-induced slowdown and
continued the forward momentum from Q2, gaining a median 3.0 per
cent in Q3. The median year-to-date return for Canadian DB plans
stood at 5.2 per cent for the period ending September 30, 2020.
"Canadian defined benefit pension plans remained in positive
territory through the third quarter as global markets continued
their liquidity-driven climb from the first quarter," reported
David Linds, Managing Director and Head of Asset Servicing,
Canada at RBC Investor &
Treasury Services. "As we head now toward year-end, we are facing
potential headwinds such as the resurgence of COVID-19 and
uncertainty over the upcoming US presidential election and
government support programs. We can expect an increase in market
volatility – as these factors have the potential to discourage
global markets and lower investors' appetites for taking on
risk."
After a lofty performance in the second quarter, Canadian
equities continued to advance in Q3, with the TSX Composite
increasing 4.7 per cent. Nine of the sectors in the benchmark
generated positive returns, led by industrials (13.6 per cent) –
with CN Rail and CP Rail as the most significant contributors –
followed by utilities (11.0 per cent) and materials (9.1 per cent).
In negative territory were health care and energy. On a
year-to-date basis, the TSX Composite index was down -3.1 per cent,
with the IT sector (68 per cent) handily outperforming the other
economic sectors. DB pension plans' Canadian equities holdings
returned a median of 5.2 per cent for the quarter, modestly
outperforming the TSX Composite by 0.5 per cent.
DB pension plans' foreign equities holdings returned a median
5.8 per cent, with US stocks outperforming their non-North American
counterparts. The positive results in the US market were
concentrated on select large cap growth stocks. The MSCI World
Index returned 5.9 per cent, edging out Canadian DB Pension Foreign
Equity holdings by a small margin.
The Canadian fixed income asset class return in the peer
universe was relatively flat for the quarter, returning 0.7 per
cent. The FTSE Canada Universe bond index meanwhile returned 0.4
per cent over the third quarter – compared to 5.9 per cent in the
second quarter – as central banks around the world continued to
signal their commitment to bolstering their respective economies.
Year-to-date, Canadian fixed income was the best performing asset
class in the peer universe, with a median return of 10.3 per
cent.
Historic performance
Period
|
Median
return (%)
|
Period
|
Median
return (%)
|
Q3 2020
|
3.0
|
Q2 2018
|
2.2
|
Q2 2020
|
9.6
|
Q1 2018
|
0.2
|
Q1 2020
|
-7.1
|
Q4 2017
|
4.4
|
Q4 2019
|
2.0
|
Q3 2017
|
0.4
|
Q3 2019
|
1.7
|
Q2 2017
|
1.4
|
Q2 2019
|
2.7
|
Q1 2017
|
2.9
|
Q1 2019
|
7.2
|
Q4 2016
|
0.5
|
Q4 2018
|
-3.5
|
Q3 2016
|
4.2
|
Q3 2018
|
0.1
|
Q2 2016
|
2.9
|
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 a cross-section of 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
Royal Bank of Canada is a global financial institution with
a purpose-driven, principles-led approach to delivering leading
performance. Our success comes from the 86,000+ employees who bring
our vision, values and strategy to life so we can help our clients
thrive and communities prosper. As Canada's biggest bank, and one of the largest
in the world based on market capitalization, we have a diversified
business model with a focus on innovation and providing exceptional
experiences to our 17 million clients in Canada, the U.S. and 34 other countries. Learn
more at rbc.com.
We are proud to support a broad range of community initiatives
through donations, community investments and employee volunteer
activities. See how at rbc.com/community-social-impact.
About RBC Investor & Treasury Services
RBC
Investor & Treasury Services (RBC I&TS) is a
specialist provider of asset services, custody, payments and
treasury and market services for financial and other institutional
investors worldwide, with over 4,500 employees in 16 countries
across North America, Europe and Asia. We deliver services which safeguard
client assets, underpinned by client-centric digital solutions
which continue to be enhanced and evolved in line with our clients'
changing needs. Trusted with CAD 4.5
trillion in client assets under administration, RBC I&TS
is a financially strong partner with among the highest credit
ratings globally.
SOURCE RBC Investor & Treasury Services