The median return for pension plans was 13.9% in their stock portfolios, non-canadian, compared to 14.2% for the MSCI World index (18.5% in local currency).
Plans defined benefit pension plans have rebounded strongly once the shock of the pandemic in the past, to register in the second quarter with a median return record, according to the indicator of RBC.
According to the data of a defined benefit component, the universe of RBC investor Services and cash, the median performance is shown to 9.6 % in the second quarter.
“This is the quarterly performance of the highest in the history of this indicator the standard, compensating for the heavy losses incurred in the first quarter with the median return of the plans since the beginning of the year to 1.4 %,” stressed the institution.
RBC is not without linking this performance to measures to support fiscal and monetary policy put in place in march to counter the impact of the shutdown near-total in the global economy because of the COVID-19.
The march low
Since the beginning of 2016, these regimes have known that two quarterly returns negative, the other, of -3,5 %, have been registered during the last three months of 2018.
By segment, the institution adds that the world’s stock markets recovered from the march lows to regain most of the ground lost in the first quarter.
“Although the actions to be cyclical in nature have briefly traced, the growth stocks eventually outperform value stocks. “The median return of the pension plans was 13.9 % in their stock portfolios, non-canadian, compared to 14.2% for the MSCI World index (18.5 % in local currency).
Growth in Canada
In Canada, the TSX composite index has posted an increase of 17 %, supported by the sectors of information technology, raw materials, consumer discretionary and energy. Canadian equities posted a median return of 13 %, four percentage points less than the benchmark. Since the beginning of the year, they ceded to 10.4 %.
The fixed income securities have taken to 8.7 %, compared to 5.9 % for the bond index universal FTSE TMX Canada, adds RBC.
At the beginning of the month, the firm Mercer noted that in the second quarter, funding levels of defined benefit pension plans have recovered a little less than half of the losses incurred in the first quarter.
“In spite of the difficulties of the last few months, most of the pension plans, defined benefit plans have emerged fairly well from the worst of the crisis, he said. The performance of a typical balanced portfolio would have returned an exceptionally strong 13 % in the second quarter. “