A recovery in global stocks helped provide a boost to Canadian pension assets in the first quarter, according to RBC Investor Services. DB pensions earned 4.4% in Q1, bringing 12-month returns to 9.4%.
“On the back of optimism over the U.S. recovery—and central bank commitments to maintain loose monetary policies—investors built on last fall’s run, helping pension plans to maintain momentum,” says Scott MacDonald, head, pensions, insurance and sovereign wealth strategy, with RBC Investor & Treasury Services.
Global equities continued to be the best-performing asset class as pension plans kept pace with the MSCI World Index, which rose 10% in the quarter. The strength was mainly from the U.S. market, which set new highs, as well as Japanese stocks, which rose more than 20%.
Canadian equities also helped pensions as the S&P/TSX Composite Index increased 3.3% in Q1.
On the fixed income side, bond returns were lacklustre.
“With recent events in Cyprus spooking some investors back to the bond market,” adds MacDonald, “Canadian pension plans earned 0.6% over the last three months in their fixed income allocation.”
This article originally appeared on BenefitsCanada.com.