Ontario’s new public sector pension manager comes into effect

Defined-benefit (DB) pension plans managed to deliver positive returns in the second quarter (Q2) despite weakness in Canadian equities, according to a new report from Royal Bank of Canada’s (RBC) investor and treasury services division.

Specifically, the report points out that DB plans returned 1.4% in Q2 even as Canadian equities dropped by 1.9%. Furthermore, the report indicates that global equities gained 2.3% and Canadian fixed-income rose by 1.4% in the quarter.

“Despite positive economic indicators of a healthy Canadian economy, depressed energy and commodities were amongst the poorest performing sectors to drag on domestic equities,” says James Rausch, head of client coverage, Canada, RBC Investor & Treasury Services, in a statement. “Nevertheless, Canadian pension fund managers have continued to prudently manage portfolio allocations, remaining underweight in Canadian equities compared to domestic fixed-income and global equities and generating yet another positive overall return for the quarter.”

RBC also notes a stronger Canadian dollar continued put pressure on financial returns in Q2.

Photo copyright: convisum/123RF