Canadian pension plans showed improved returns in third quarter: RBC Dexia

THE CANADIAN PRESS

TORONTO - Canadian pensions continued to see growth from their investment holdings in the third quarter, although the improvement was more subdued than in the April-June period, according to RBC Dexia Investor Services.

At Sept. 30, pensions tracked by the advisory firm had collectively earned 7.2 per cent for the third quarter and 14.3 per cent for the nine months beginning Jan. 1, RBC Dexia said Wednesday.

In comparison, Canadian pension plan assets grew by 9.5 per cent in the April-June quarter, according to RBC Dexia\'s previous survey.

In the third quarter, Canadian stocks grew 10.6 per cent while in the second quarter they were up 20 per cent in their best three-month showing since 1999.

\"Advances were fairly broad, but the top heavy weightings in financials, energy and the materials sectors accounted for more than two thirds of the increase so far this year,\" said Don McDougall, director of advisory services for RBC Dexia.

\"Remarkably, pensions kept pace with the S&P TSX composite index in the quarter despite being underexposed to all three key sectors.\"

Foreign stocks were up 10.5 per cent for the first nine months, after conversions into Canadian dollars, although the benchmark MSCI world index rose by 20.3 per cent over the same period when measured in local currencies.

Canadian bonds were up 3.4 per cent in the third quarter, and 8.2 per cent for the first nine months of 2009. In the second quarter, Canadian bonds earned 2.3 per cent.