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Pension funds claw back from losses caused by the economic crisis.
Toronto (22 January 2010) – Resurging global equity markets continued to lift pension assets in the fourth quarter, marking an end to a remarkable year which saw plan sponsors gain back most of their 2008 losses, according to a survey just released by RBC Dexia Investor Services.
Based on the $ 340 billion of pension assets the survey covered, Canadian pension plans earned 1.9 percent in the last three months ending December 31, 2009, bringing year-end results to 16.2 percent.
“The speed of the rally, particularly in the second and third quarters caught pensions by surprise, as many remained under-exposed to equities,” said Don McDougall, Director of Advisory Services for RBC Dexia. “Then again, after last year’s brutal 15.9 per cent drop, it is reassuring to see pension plans claw back to pre-crisis state.”
Canadian equities were the top performing asset class as the S&P TSX Composite index posted its best calendar year result since 1979, soaring 35.1 percent.
“All sectors advanced, with most gaining double digits - but the top heavy weightings in financials, energy and the materials sectors accounted for more than 85 per cent of the market’s rise this year,” noted McDougall.
“Amazingly, pensions remained under-weighted to all three major groups throughout the year and still managed to outpace the index by 0.3 per cent on the strength of superior security selection.”
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