Soaring energy stocks lifted Canadian pension plans into positive territory in the second quarter despite lingering global credit concerns, according to a survey released today RBC Dexia Investor Services.

Within the $340 billion RBC Dexia universe, Canadian pension funds earned 1% in the quarter ended June 30, trimming six month losses to 1%. “Albeit modest, after posting three consecutive negative quarters, it’s a welcome reprieve, especially considering the weakness in other global markets,” says Don McDougall, director of advisory services for RBC Dexia.

Canada’s energy rich equity market continued to buck the worldwide trend as high-flying oil prices made the S&P TSX Composite Index one of the best performers in the world — up a whopping 9.1% for the quarter. Energy stocks were up 22.9% for the quarter, accounting for more than three quarters of the gain, while one individual stock — Potash Corporation of Saskatchewan — accounted for most of the rest. “Unfortunately, with advances so narrowly focussed, Canadian pensions had a difficult time keeping pace and underperformed the composite benchmark by 0.9% this quarter — and by 3% over the year-to-date,” observes McDougall.

Global stocks continued to be the worst-performing asset class, slipping 3.4% in the quarter while underperforming the MSCI World Index by 0.6%. “In local currency terms, the index has plunged 12.8% since the beginning of the year, but pension plans have lost only 9% once exchange rates are taken into account,” notes McDougall.

Canadian pension plans also saw their fixed income holdings lose 0.3% over the quarter, as mounting speculation over inflation kept domestic bonds in the red throughout the period but managed to outperform the DEX Universe Bond Index by 0.4%. “Fortunately for those holding real return bonds, they unsurprisingly flourished in this type of environment, gaining an impressive 10.7% over six months,” says McDougall.