Global equity markets continued to rebound in the June quarter, lifting Canadian pension plan assets by 9.5% over the period, according to a survey just released Monday by RBC Dexia Investor Services.

Within the $310 billion RBC Dexia universe, pension funds have earned year-to-date investment gains of 6.5%.

“Given last year’s brutal pull-back, plan sponsors are breathing a sigh of relief to be finally moving into positive territory, especially after the poor January and February start,” said Don McDougall, director of advisory services for RBC Dexia, in a release.

Canadian equity was the top performing asset class as the S&P/TSX composite index gained 20%, its best three-month showing since 1999. “The two largest sectors, financials (up 34.5%) and energy (up 21.6%) accounted for most of the increase, remarkably pensions were generally under-exposed to both but still managed to beat the index by 1.0% this quarter on the strength of superior stock selection,” said McDougall.

Foreign stocks also rallied, driving the MSCI world index up 16.5% in local currency terms during the quarter. “For unhedged Canadian-based investors, a stronger loonie — particularly against the U.S. dollar — slashed foreign equity returns to 11.0%,” observed McDougall.

In domestic bonds, Canadian pensions continued to gain lost ground on the DEX universe index as corporate spreads narrowed considerably from their peaks, earning 2.3% in the quarter and 4.3% year-to-date.

IE