RBC: Canadian Pension Yield Up Slightly in Third Quarter



Canadian corporate and public pension plans in the RBC Investor & Treasury Services universe posted a median gross return of 0.6% during the quarter ended September 30.

A press release issued on Friday said the nearly stable median return was due to a negative market environment in September which offset positive returns in July and August.

Canadian equities posted a median gross return of 1.5%, while the S & P / TSX Composite Index returned 0.2% for the quarter.

The index’s positive sectors were consumer staples, energy and industrials, while the press release cited materials – due to the poor performance of gold stocks – and consumer discretionary stocks as latecomers during the third trimester.

“Market volatility returned in September amid global concerns about the impact of labor shortages, strained supply chains and rising consumer prices, all due to the delta variant of the COVID-19, “Niki Zaphiratos, Managing Director and Head, Asset Owners, Coverage Client, Canada, for RBC Investor & Treasury Services, said in the press release.

“Investors are vigilant in anticipation of a debt limit showdown in December and the ongoing struggles to reach an infrastructure deal and a financing deal in the United States,” Zaphiratos added. “Central banks are already moving away from some of the ultra-accommodative monetary policies as inflationary pressures persist.

“In response, plan managers are increasingly investing in a wider variety of asset classes such as private equity, real estate and infrastructure that can hedge against inflation. “

Foreign stocks of Canadian pension plans posted a median return of 1.4% for the quarter ended September 30, while fixed income securities posted a median return of -0.8%, the statement said.

The universe had gained a median gross return of 4.4% in the second quarter and had a median return of 3% in the third quarter of 2020.



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