The median Canadian pension plan returned 0.6 per cent during the second quarter of 2025, resulting in a 1.8 per cent year-to-date return for the period ending June 30, according to a new report by Northern Trust.
It found equities produced attractive returns while Canadian bonds were impacted by the rise in yields, causing a modest decline in the Canadian bond universe.
Read: Average Canadian DB plan achieves 1.6% investment return in Q2 2025: report
Returns from Canadian stocks rose to 8.5 per cent during the quarter due to strong results from the information technology and consumer discretionary sectors. International equities, as measured by the S&P 500 index (5.2 per cent), the MSCI EAFE index (6.2 per cent) and the MSCI emerging markets index (6.4 per cent), also offered strong results to pension plans in Q2.
However, the Canadian fixed income market measured by the FTSE Canada universe bond index posted a negative 0.6 per cent for the quarter.
The Canadian economy faced headwinds from tariff and trade uncertainty but noticed some pockets of resilience with wage growth remaining above inflation, personal savings rates remaining healthy and banks getting credit losses under control and building reserves, the report said.
It also noted the Canadian dollar appreciated over five per cent relative to the U.S. dollar, finishing the quarter with a value of US$73.48 cents.
“Beneath the mounting tensions and waves of volatility witnessed year to date, pension plan investments have performed reasonably well, contributing to the healthy rise in plan assets this year,” said Jeff Alexander, president and chief executive officer at Northern Trust Canada, in a press release. “This positive performance serves as a cushion providing further support to long-term plan sustainability as plan sponsors navigate through uncertain times.”
Read: Average solvency ratio of Canadian DB plans increase to 126% in Q2 2025: report