RBC Investor Services' Canadian pension plans return 5.1% over the quarter, as fixed income and equity markets post healthy returns

TORONTO, Oct. 30, 2024 /CNW/ - RBC Investor Services (RBCIS) reports a positive median return of 5.1% for its clients' defined benefit (DB) pension plans over the third quarter of 2024, and a 9.6% year-to-date return for the period ending September 30, 2024. This analysis, which RBCIS reports on following each quarter, encompasses various client plans across private and public sectors.

Global equities for RBCIS DB pension plans generated gains of 5.5%, slightly surpassing the MSCI World Index, which returned 5.0%. Utilities (16.1%) and Real Estate (15.4%) were the top performing sectors in the benchmark. Weakness in the Information Technology sector (0.2%), which has a large weight in the benchmark, tempered overall performance. Unlike the first half of 2024, value style stocks outpaced their growth counterparts this quarter, with the MSCI World Value Index up 8.2% compared to MSCI World Growth Index's 2.2% return. The MSCI Emerging Markets Index (7.3%) enjoyed a robust quarter and outperformed the developed market index primarily due to strength in the Chinese equity market (21.9%).

Canadian equities for client plans have a large exposure to value style stocks and outperformed their global counterparts at 9.6%, while the TSX Composite Index returned 10.5%. The heavy weight in Financials (17.0%) and Materials (12.2%) drove performance over the quarter for the TSX.

Meanwhile, in the Canadian fixed income asset class, RBCIS DB pension plans returned 4.9%, slightly overperforming the FTSE Canada Universe Bond Index, which experienced a return of 4.7% as the market continued to react favourably to the Bank of Canada's consecutive interest rates cuts in 2024. Over the quarter, long-term bonds outperformed their short-term counterparts, with the FTSE Canada Long Term Bond Index up 5.7% compared to the FTSE Canada Short Term Bond Index that returned 3.4%.

"While this quarter marks improved returns for RBCIS DB pension plans, the report emphasizes the ongoing need for diversification and proactive risk management," says Isabelle Tremblay, Asset Owner Segment lead at RBC Investor Services. "With the additional 50 basis points Bank of Canada rate reduction announced in October, and the U.S. presidential election on the horizon, plan managers continue to adapt their strategies for the evolving pension landscape."

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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 1,600 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 and one of the top 10 banks globally, RBC Investor Services has over C$2.4 trillion of assets under administration. Learn more at rbcis.com.

Media contact:
Brianne Sommerville, RBC

SOURCE RBC Investor Services