Canadian defined benefit pension plan sponsors are finding portfolio resiliency in an environment challenged by questions about the technology sector in the U.S., says Katie Pries, country executive for Northern Trust Canada.
“We saw some impact on technology stocks, we saw that decline and we did attribute that to investors taking stock of some of the possible implications of artificial intelligence capabilities and the increasing capital investment levels.”
Indeed, Pries’ team is following the trend of investors considering the implications of new AI capabilities. She has also noticed investors are starting to question how to measure rates of return on the significant investment attracted by AI opportunities. “Everyone is hoping to see [a return] but [its] yet to be determined.”
Read: Canadian DB pension plans return 0.4% in Q1 2026 amid geopolitical tensions: report
Northern Trust’s most recent pension index report noted the U.S.’s partial government shutdown, which ran between Feb. 14 and April 30, added disruption and increased volatility alongside the continued conflict between the U.S. and Iran. However, it also found Canadian investors were able to record a median 0.4 per cent return in the first quarter of 2026.
The conflict in Iran and the uncertainty of when the Strait of Hormuz will reopen is upending the global supply chain, with ripples affecting the rest of the global economy. Pries says the short-term geopolitical noise is impacting day-to-day results, but institutional investors have the benefit of navigating these periods of volatility with a long investment horizon.
As well, the investments of the Canadian pension universe are well protected through a diversification approach, she adds, noting that, despite the low results seen in Q1, they’re indicative of how well these plans are responding to the current environment.
“There are things that are going to be outside [their] control, but they’ve done a really good job of managing that uncertainty.”
Read: Reliance on premium technology stocks limiting diversification for institutional investors: expert