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TORONTO, April 23, 2014 /CNW/ - Pension assets rose for a third successive quarter as global financial markets continued to progress during the first quarter, according to the latest survey from RBC Investor & Treasury Services.
Within the $520 billion RBC Investor & Treasury Services All Plan universe - the industry's most comprehensive universe of Canadian pension plans - defined benefit (DB) pension assets returned 4.8 per cent during the three months ending March 31, 2014, bringing 12 month totals to 14.8 per cent.
"Strong equity gains domestically and a weaker Canadian dollar helped boost foreign holdings, but lower long-term bond yields will have increased most plan liabilities," said Scott MacDonald, managing director, Pensions for RBC Investor & Treasury Services.
Canadian stocks were the top performing asset class, rising 5.8 per cent for the quarter and 21.2 per cent for the year ending March 2014. "Advances were broad across all sectors, led by the materials group and gold stocks in particular which rebounded off last year's low," said MacDonald. "Pensions maintained their underexposure to the sector and accordingly lagged the S&P/TSX Composite Index by 0.3 per cent during the quarter but maintained their 5.2 per cent outperformance over the previous 12 months."
Foreign equities moved higher for a seventh successive quarter, advancing 5.3 per cent in Canadian dollar terms against 5.2 per cent for the MSCI World Index. "Currency gains accounted for the bulk of the return this quarter, as the Canadian dollar continued to slide against most major currencies," added MacDonald. "Over the last year, the Canadian dollar has lost eight per cent against the US dollar, 14.2 per cent against the Euro and 16.2 per cent against the British pound."
Bonds also contributed to Canadian pension plan asset growth, earning 3.1 per cent in the quarter thanks to an early January rally. "Strength came from the longer end of the curve, with FTSE/TMX Long Term bonds rising 5.1 per cent and FTSE/TMX Real Return Bonds up 6.1 per cent," said MacDonald.
About RBC Investor & Treasury Services
RBC Investor & Treasury Services (RBC I&TS) is a leading specialist provider of asset servicing, custody, payments and treasury services for financial and other institutional investors worldwide. We serve clients from 19 locations across North America, Europe and the Asia-Pacific region. We deliver custodial, advisory, financing and other services to safeguard clients' assets, maximize liquidity and manage risk in multiple jurisdictions. RBC I&TS is ranked among the world's top 10 global asset servicing businesses, with CAD 3.4 trillion (USD 3 trillion) in client assets under administration (as of February 26, 2014).
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 services, insurance, investor services and capital markets products and services on a global basis. We employ approximately 79,000 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 42 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 2013, we contributed more than $104 million to causes worldwide, including donations and community investments of more than $69 million and $35 million in sponsorships. Learn more at www.rbc.com/community-sustainability.
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