TORONTO, April 30, 2015 /CNW/ - During a quarter that featured falling
oil prices, a Bank of Canada rate cut and uneven global economic data,
Canadian pension plans generated positive returns for the seventh
consecutive quarter.
According to the $600 billion RBC Investor & Treasury Services All Plan
universe - the industry's most comprehensive universe of Canadian
pension plans - defined benefit (DB) pension plans returned 6.6 per
cent for the first quarter of 2015.
"Following the Bank of Canada's surprise rate cut announcement in
January, long term interest rates continued to fall. Even though their
asset performance for the quarter was strong, Canadian pensions face
growing pressure if asset returns fail to keep pace with liabilities,"
said Scott MacDonald, managing director, Pensions, RBC Investor &
Treasury Services.
The best performing asset class in the first quarter was Foreign
Equities, which returned 12.0 per cent, in line with the benchmark MSCI
World Index return of 11.9 per cent. "While both U.S. and non-U.S.
foreign equities delivered double digit returns for Canadian investors
in the first quarter, the two segments had contrasting performance
drivers: U.S. equities were boosted by the U.S. dollar appreciating 9.3
per cent against the Canadian dollar, even as U.S. markets stayed flat.
Europe, on the other hand, benefitted from cheap oil, increasing
exports, and the implementation of the European Central Bank's
Quantitative Easing program," said MacDonald.
Canadian equities returned 2.3 per cent for the quarter versus 2.6 per
cent for the benchmark TSX Composite Index. "Despite Financials and
Energy declining, deal activity in the Health Care sector along with
gains in IT and Consumer Discretionary helped offset those losses,"
said MacDonald.
"As Canadian 10 year yields fell for the fifth consecutive quarter,
Canadian pensions' bond holdings returned 4.6 per cent. Long-duration
bonds continued to be the best performing segment, with the FTSE TMX
Canada Long Term Overall Bond Index returning 7.1 per cent for the
quarter," said MacDonald.
About RBC Investor & Treasury Services
RBC Investor & Treasury Services (RBC I&TS) is a specialist provider of
asset services, custody, payments and treasury services for financial
and other institutional investors worldwide. We serve clients from 18
locations across North America, Europe, Asia and Australia, delivering
custodial, advisory, financing and other services to safeguard clients'
assets, maximize liquidity and manage risk in multiple jurisdictions.
RBC I&TS ranks among the world's top 10 global asset servicing
businesses, with CAD 3.7 trillion (USD 3 trillion) in client assets
under administration (as at January 31, 2015).
About RBC
Royal Bank of Canada is Canada's largest bank, and one of the largest
banks in the world, based on market capitalization. We are one of North
America's leading diversified financial services companies, and provide
personal and commercial banking, wealth management, insurance, investor
services and capital markets products and services on a global basis.
We employ approximately 78,000 full- and part-time employees who serve
more than 16 million personal, business, public sector and
institutional clients through offices in Canada, the U.S. and 39 other
countries. For more information, please visit rbc.com.
RBC supports a broad range of community initiatives through donations,
sponsorships and employee volunteer activities. In 2014, we contributed
more than $111 million to causes worldwide, including donations and
community investments of more than $76 million and $35 million in
sponsorships.
SOURCE RBC
