Canadian investment managers predict moderate returns in 2007, according to a survey.
Mercer Investment Consulting’s 2007 Canadian Fearless Forecast survey reveals that mangers expect equity returns of 7% to 9%. U.S. and international markets are forecast to deliver the highest returns, with Japan and the U.K. forecast to be among the top performing countries.
Equity markets are also expected to outpace bonds, which are predicted to deliver returns of 3.3% to 4.8%.
“The majority of managers are calling for long bonds to deliver returns near current yields in 2007 and over the next five years, which coupled with modest equity returns for the next few years suggest that pension plan sponsors may have to continue to make substantial pension contributions,” says Peter Muldowney, business leader for Mercer Investment Consulting in Canada.
This could entice pension plan sponsors to consider taking more investment risk to expect to improve financial health of pension plans.”
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