Buoyant equity markets in the final quarter of 2006 lifted Canadian pension fund returns into double-digits for the fourth consecutive year, according to a survey released by RBC Dexia Investor Services.
Within the $340 billion RBC Dexia universe, pension funds earned 7.2% in the quarter ended Dec. 31, 2006, boosting year-end performance to a healthy 12.9%. Almost all the annual gains were concentrated in the final six months.
“With many of the world’s major stock markets finishing the year at or near record highs, global equities were the star performers of 2006,” noted Don McDougall, director advisory services, RBC Dexia Investor Services.
Market gains and the euro’s 10% rise against the loonie produced an impressive 21.6% annual increase in Canadian Pension Plans’ foreign performance results.
“Since the Canada Revenue Agency lifted foreign content restrictions in 2005, global stock market performance matters more than ever,” added McDougall. “RBC Dexia statistics reveal a growing exposure to foreign equities. At year-end, 29.6% of Canadian pension assets were invested in global stocks, an all-time high.”
Domestic stocks also performed notably. Moreover, by limiting exposure to the weakened energy sector, Canadian pensions beat the S&P//TSX composite benchmark by a full percentage point, gaining 18.3% over the year.
In contrast, Canadian bonds posted their worst annual performance since 1999: 4.1%, matching the Scotia Capital Universe Bond Index.
Canadian pension plans ride stocks to another double-digit year
Global equities the star performers, says RBC Dexia
- By: IE Staff
- January 19, 2007 October 31, 2019
- 11:25