RBC Investor Services' Canadian DB pension plans return 1.6% over the quarter, capping year with solid 11.3%

TORONTO, Jan. 30, 2025 /CNW/ - RBC Investor Services (RBCIS) reports a positive median return of 1.6% for its clients' defined benefit (DB) pension plans over the fourth quarter of 2024 and closes the year with its strongest yearly median return in five years at 11.3% for the period ending December 31, 2024. This analysis encompasses various RBCIS client plans across private and public sectors.

"Powered by healthy returns in the equity market, we are pleased to report our fourth consecutive positive quarter for RBCIS DB client plans for 2024," said Isabelle Tremblay, Asset Owner Segment Lead at RBC Investor Services.

Global equities for RBCIS DB pension plans generated gains of 4.1% this quarter, led by U.S. equities whose returns were boosted by a rapid depreciation of the Canadian dollar versus the U.S. dollar. Over the quarter, the MSCI World Index returned 6.3%, led by the Consumer Discretionary (15.7%), Communication Services (13.6%) and Information Technology (11.4%) sectors. On a one-year basis, global equities for client plans returned 24.1%, while the MSCI World Index returned 29.4%, where the top performing sectors were Communication Services (46.0%), Information Technology (45.0%) and Financials (38.2%).

Canadian equities for client plans underperformed their global counterparts, in part due to a smaller exposure to growth style stocks. They closed the quarter at 3.2% and the year at 21.2% aligning closely with the TSX Composite Index's 3.8% and 21.7% respectively. Top performing sectors for the TSX both this quarter and 2024 included Information Technology (22.2% quarterly and 38.0% annual return), Financials (6.6% quarterly and 30.1% annual return) and Energy (6.6% quarterly and 24.0% annual return).

In the Canadian fixed income asset class, RBCIS DB pension plans experienced a -0.2% loss for the quarter and 3.6% for the year, aligning with the FTSE Canada Universe Bond Index's -0.04% for Q4 and 4.2% for 2024. Over the year, the FTSE Canada Short Term Bond Index's annual return of 5.7% outperformed the FTSE Canada Long Term Bond Index's return of 1.4% as the market responded to the Bank of Canada's substantial interest rates reductions.

"Our analysis shows solid annual returns for RBCIS DB pension plans, but also emphasizes the need for diversification and active risk management, especially as we enter a year of uncertainty," added Isabelle Tremblay. "Plan managers continue to adapt their strategies for the evolving pension landscape as we prepare for political changes, including possible U.S. government policies and new Canadian Prime Minister."

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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.

Media contact:
Brianne Sommerville, RBC

SOURCE RBC Investor Services