Canadian defined benefit pension plans ended 2018 in negative territory, with an annual return of -0.7 percent, reversing gains from the previous three quarters this year, according to the RBC Investor & Treasury Services (RBC I&TS) All Plan Universe.
Plan returns posted a Q4 2018 return of -3.5 percent compared to a 0.1 percent gain in Q3 2018. The annual return in 2017 was 9.7 percent.
Canadian equities were hit hard in Q4 2018, returning -10.6 percent.
Ryan Silva, director, head of pension and insurance segments, global client coverage at RBC I&TS, said: “Geopolitical and economic uncertainty reverberated through the market all year. Trade wars, rate hikes, oil prices, and Brexit helped contribute to lower earnings expectations which drove returns sharply lower in Q4 and for the year.”
“With the Federal Reserve pausing on rate hikes as well as trade negotiations between the US and China showing progress in January, markets have started the year strong but investors need to remain vigilant as we are approaching the end of the market cycle and volatility is unlikely to go away.”
.jpg)