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Pension Funds

Canadian pension funds eke out 0.2% return in first quarter – report

Canadian corporate and public pension plans in the RBC Investor & Treasury Services universe returned an overall 0.2% on their investments in the first quarter, down from the 4.4% return in the fourth quarter and the 2.9% gain in the first quarter 2017.

The quarter was the eighth consecutive in which plans in the universe had overall positive returns, according to a news release from RBC. The last overall quarterly loss was in the third quarter 2015, when plans lost 2%, while the first quarter 2016 was flat.

Pension plans' returns were hit hard by a 3.9% loss in the plans' Canadian equities investments in the latest quarter, while global equities returned 2%. Canadian fixed income eked a 0.1% gain in the quarter and the Canadian dollar depreciated vs. the U.S. dollar by 2.9% to 78 cents per C$1 as of March 31.

"The first quarter of 2018 was full of instability and volatility, with Canadian equities taking the biggest hit," Ryan Silva, director, head of pension and insurance segments, global client coverage, at RBC Investor & Treasury Services, said in the release. He cited losses in the health-care and energy sectors, uncertainty around NAFTA trade negotiations, geopolitical concerns and worries over rising interest rates as reasons for the investment returns.

The RBC Investor & Treasury Services universe has a combined C$650 billion ($504 billion) in pension assets.