Canadian corporate and public pension plans in the RBC Investor & Treasury Services universe saw a median gross return of 0.5% in the three months ended Sept. 30.
The nearly flat median return was because the positive returns in July counteracted the negative returns in August and September, said Niki Zaphiratos, managing director, asset owners, at RBC Investor & Treasury Services, in a news release Monday.
"As we head toward year-end, we are facing various headwinds: the emergence of new COVID-19 variants, the fear of upcoming central bank interest rate hikes and quantitative tightening to combat high and persistent global inflation, and the implications of the Russo-Ukrainian war and U.S.-China tensions," Ms. Zaphiratos said. "Economic uncertainty remains high, and pension fund managers are preparing for ongoing market volatility as the weight of these pressures continues to be felt."
Canadian equities held by Canadian pension plans returned a median gross -1.2% for the third quarter, slightly outperforming the S&P/TSX Composite index, which returned -1.4% for the period. Positive sectors in the index were industrials and consumer discretionary, while the news release noted weaknesses in the communication services and energy sectors during the three months ended Sept. 30.
Fixed-income securities held by Canadian pension plans returned a median gross 1.1% for the quarter ended Sept. 30, above the return of 0.5% for the FTSE Canada Universe Bond index for the period.
Canadian pension plans' foreign equities returned a median -1.1% for the three months ended Sept. 30, slightly behind the MSCI World index return of -0.1% for the period. The news release also said plans with unhedged U.S. dollar exposure benefited from that currency's rapid appreciation during the third quarter, driven by investors flocking to that safe haven.
The universe had returned a median gross of -8.6% in the second quarter and had a median return of 0.6% in the third quarter of 2021.
