Defined benefit plans that are clients of RBC Investor Services delivered a modest gain of 1.1% in the first quarter of 2025, said a news release April 30.
This quarterly gain was achieved despite ongoing market volatility fueled by geopolitical tensions, shifting trade policies and political changes both globally and domestically.
Canadian equities returned 1.2% for pension plans, slightly underperforming the TSX Composite index, which gained 1.5%. This positive performance was largely driven by the materials sector, which surged 20.3% on the strength of gold stocks. However, the information technology sector declined 7.5%, reflecting broader challenges within that industry.
Foreign equities held by pension plans slipped 0.1% in the first quarter, while the MSCI World index declined 1.7%. Still, within the benchmark, there was a sharp contrast between the performance of value and growth stocks: the MSCI World Value index rose by 4.9%, while the MSCI World Growth index dropped 7.7%.
Meanwhile, U.S. equities, as represented by the S&P 500 index, declined 4.2%, underperforming the MSCI EAFE index, which gained 6.9%. The outperformance of EAFE was largely driven by strong results in European markets, particularly Germany, which is expected to benefit from fiscal stimulus, and by the euro’s appreciation against the Canadian dollar.
Stocks in the emerging markets also advanced, with the MSCI Emerging Markets index rising 3% in the quarter. Within fixed-income markets, pension plans gained 1.8%, compared with a 2% increase in the FTSE Canada Universe Bond index.
“The first quarter reminded us that sector positioning, currency exposure and geopolitical awareness are key to pension performance,” said Isabelle Tremblay, asset owner segment lead at RBC Investor Services, in the news release. “The appreciation of the euro vs. the Canadian dollar amplified foreign equity gains, while political developments, including leadership changes both domestically and abroad, sparked investor recalibration. Pension plans that remained diversified and nimble were better positioned to navigate these challenges.”
RBC Investor Services, a unit of Royal Bank of Canada, has more than C$2.6 trillion ($1.87 trillion) of assets under administration.
