RBC Investor Services' Canadian DB pension plans generate modest returns while facing heightened market volatility in Q1 2025

TORONTO, April 30, 2025 /CNW/ - Despite market volatility fueled by geopolitical tensions, shifting trade policies and political changes both globally and domestically, defined benefit (DB) pension plans managed by RBC Investor Services clients posted a modest gain of 1.1% in the first quarter of 2025. The results are based on a recent analysis encompassing various client plans across private and public sectors.

Canadian equities returned 1.2% for pension plans, slightly underperforming the TSX Composite Index, which rose 1.5%. The materials sector was the main contributor to positive performance, surging 20.3% on the strength of gold stocks. However, the information technology sector declined 7.5%, reflecting broader challenges within the tech industry.

Foreign equities held by pension plans fell 0.1%, while the MSCI World Index declined 1.7%. Within the benchmark, there was a sharp contrast between the performance of value and growth stocks: the MSCI World Value Index rose 4.9%, while the MSCI World Growth Index fell 7.7%. Meanwhile, U.S. equities, as represented by the S&P 500, declined 4.2%, underperforming the MSCI EAFE Index, which gained 6.9%. The EAFE's outperformance was driven by strong results in European markets, particularly Germany, which is expected to benefit from fiscal stimulus, and by the euro's appreciation against the Canadian dollar.

Emerging markets also advanced, with the MSCI Emerging Markets Index rising 3.0%.

In fixed income markets, pension plans gained 1.8%, compared to a 2.0% increase in the FTSE Canada Universe Bond Index. Mid-term bonds led the way, climbing 2.7%, reflecting investors' preference for safer assets amid ongoing uncertainty surrounding central bank policies and political transitions.

"The first quarter reminded us that sector positioning, currency exposure and geopolitical awareness are key to pension performance," said Isabelle Tremblay, Asset Owner Segment Lead at RBC Investor Services. "The appreciation of the euro versus the Canadian dollar amplified foreign equity gains, while political developments, including leadership changes both domestically and abroad, sparked investor recalibration. Pension plans that remained diversified and nimble were better positioned to navigate these challenges."

About RBC
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About RBC Investor Services
RBC Investor Services delivers investment servicing solutions to Canadian asset managers and asset owners, insurance providers, investment counsellors and global financial institutions. With more than 1,500 employees and offices across the globe, our focus is on safeguarding the assets of our clients and enabling their growth. Part of Royal Bank of Canada, Canada's largest bank, RBC Investor Services has over C$2.6 trillion of assets under administration. Learn more at rbcis.com.

For more information, please contact: 
Ylana Kurtz, RBC

SOURCE RBC Investor Services