While fixed income strategies have long been recognized as good sources of cash flow generation, alternative investments (real estate and infrastructure) and equity strategies are other useful options to help meet the needs of pension plans focused on yield-oriented strategies.
Canadian pension plans made significant gains in the third quarter as increased monetary support from central banks reassured global markets and increased investors’ appetite for taking on risk, according to the latest survey from RBC Investor Services. Within the $410 billion RBC Investor Services All Plan universe, Canadian DB pension plans gained 3.2% in the quarter ending […]
Non-Canadian investors help to fuel growth.
In recent months, bond yields have touched generational lows and yet interest in securities that provide a cash yield, continues unabated. This article aims to explain, from a demographic perspective, why this seemingly irrational pursuit for yield will continue for the next several years.
Pension plan sponsors require higher income to pay pension promises and higher returns to close the gap between their assets and liabilities. It’s not surprise that investors are increasingly focusing on investments that provide a higher yield (or current income return) due to the historically low interest rates on government bonds.
Ottawa should issue more real-return bonds (RRBs) to satisfy investor demand and lower its borrowing costs, according to a report released today by the C.D. Howe Institute.
Why Canada tops US for fixed income.
Extraordinarily low interest rates are one of the legacies of the recent financial crisis: as of July 2012, the Bank of Canada has fixed the overnight rate at 1%, and the 30-year bond yield stands at around 2.6%. Such low rates have particular implications for pension plan sponsors seeking returns in the fixed income asset class.
Uncertain growth prospects at the end of 2011 left many institutional investors taking a defensive position at the start of 2012. But their caution provided fresh fodder for a strong equity rally during the first quarter, when seasonal fund flows helped to whet risk appetites even further. The first quarter has been characterized by an […]
Canadian pension plans lost some of their first quarter gains in the second quarter of this year, as concerns over the European debt crisis and a weakening global economy pushed Canadian equities lower, according to a survey by RBC Investor Services.