“Canadian defined benefit pension plans posted a mild uptick in Q2 2018”, returning 2.2 per cent, up from Q1 returns of 0.2 per cent, according to RBC Investor & Treasury Services All Plan Universe.
In the energy sector, strong results propelled Canadian equities to return 6.8 percent, reversing the Q1 2018 loss of 3.9 percent.
RBC found global equities, impacted by trade war fears, along with central banks’ drive towards normalisation of monetary policy, returned 2.6 percent, up from Q1 2018 return of 2 percent.
Escalating tensions with the US, the impact of taxing imports and the volatility associated with policy uncertainty placed pressure on fixed income markets, meant the quarter saw almost no change, with a 0.6 percent return compared to 0.1 percent in Q1 2018.
Ryan Silva, director and head of pension and insurance segments, global client coverage at RBC Investor and Treasury Services, said: “Despite ongoing volatility at home and abroad, Canadian defined benefit pension plans have posted positive returns during the H1 2018.
He added: “The Canadian market rallied this quarter partly due to the energy sector rebound, as well as strong returns from other segments, including the materials sector. As we head in to the second half of the year, asset managers must remain vigilant.”
“North American Free Trade Agreement trade tensions, US—China trade friction and ongoing geopolitical issues will continue to reverberate through the markets, forcing asset managers to remain attentive to the ongoing volatility and its impact on portfolios and risk exposure.”
