Canadian defined benefit (DB) pension plans in RBC Investor Services’ (RBCIS) client database posted a median return of 6% in the second quarter of 2026, thanks to positive returns from both equity and fixed-income investments.
In a release on Thursday, it also reported a 6.4% year-to-date return across DB pension plans in RBC’s custody.
“This quarter was a stress test for the diversification assumptions built into most investment policies,” said Isabelle Tremblay, director, client solutions and asset owner segment lead with RBCIS, in the release. “What we’re seeing from plan sponsors is a growing interest in understanding their AI exposure, not just their asset class breakdown.”
The plans’ global equity allocations led all asset classes, with a 15.1% return for the quarter, compared to the MSCI World Index (CAD) at 15.7%. Meanwhile, the MSCI Emerging Markets Index (CAD) returned 26.1%, driven largely by semiconductor production in Taiwan and Korea.
U.S. equities led among developed markets, with the S&P 500 Index (CAD) returning 17.1% for the quarter. A weakening Canadian dollar added further to returns for plans with unhedged U.S. exposure.
Canadian equities returned 7% for the quarter, in line with the S&P/TSX Composite, “but the overall return concealed significant variation across sectors,” RBCIS noted.
The U.S.-Iran war shaped sector returns. Oil prices spiked on the initial escalation but retreated as tensions eased, bringing energy down 5% for the quarter. At the same time, inflation concerns triggered by the oil spike prompted markets to price in tighter monetary policy, causing materials to fall 11.5% amid a gold and silver selloff.
Fixed income posted gains across all maturities, with client plans returning 3% for the quarter, outpacing the FTSE Canada Universe Bond Index’s 2% return for the quarter. Longer-duration bonds led as long-term yields declined.
“With rates at the lower end of the neutral range and the outlook subject to two-sided risks, the interest rate sensitivity of both plan assets and liabilities remains a key consideration for sponsors,” RBCIS said.