Canadian pooled pension funds returned a median 0.7% in the second quarter vs. a 1.1% benchmark return, dragged down by the rise in the Canadian dollar, according to a Morneau Shepell survey.
For the first six months of 2017, the pooled funds returned a median 3.6% vs. the benchmark's 4.2%, based on an average portfolio of 55% equities and 45% fixed income, a news release on the survey said.
In the first quarter, pooled funds returned 3% vs. the benchmark's 3.1%.
The funds' Canadian equity investments returned a median -1.4% in the quarter ended June 30, vs. -1.6% for the S&P/TSX index.
U.S. equities returned 0.3% vs. 0.6% for the S&P 500 index; international equities gained 4.7% vs 3.3% for the Morgan Stanley (MS) Capital International Europe, Australasia and Far East index; global equities, 2.5% vs. 1.3% for the MSCI World index, and emerging markets equities, 4% vs. 3.6% for the MSCI Emerging Markets index. All foreign equity returns are in Canadian dollars.
"The rise in the Canadian dollar vs. several foreign currencies had a negative impact on Canadian investors," Jean Bergeron, managing partner, asset management, at Morneau Shepell, said in the release.
Canadian bond investments returned 1.1% in the quarter, matching the benchmark.
The Morneau Shepell universe covers 324 pooled funds with a market value of C$262 billion ($209 billion), managed by 50 investment management firms.