Canadian defined benefit plans’ investments weathered a late-year drop in oil prices and geopolitical tensions to return 11.9% for 2014, based on RBC Investor & Treasury Services’ quarterly survey.
The fourth-quarter return was 2.7%, above the 1.1% return in the third quarter.
For the year, foreign equities saw the best performance among asset classes, returning 13.5%, spurred by the depreciating value of the Canadian dollar vs. the U.S. dollar. U.S. equities, which returned 22.9%, contributed most of the foreign equity gains, said Scott MacDonald, managing director, pensions, at RBC Investor & Treasury Services, in a news release about the survey.
Canadian equities returned 10.5% in 2014. Mr. MacDonald said Canadian plans were underweight energy and materials, which helped them withstand the fall in oil and commodity prices in the second half of the year.
Canadian bonds returned 9.9%, with long-duration bonds the best performing segment at 17.5%.
The pension funds in the universe, both public and corporate, have a combined C$520 billion (US$411 billion) in assets.