Canadian defined benefit pension plans returned 4.4 per cent in the second quarter of 2021, according to RBC Investor & Treasury Services’ latest all-plan universe.
The report found average Canadian DB pension plan returns grew by 0.9 percentage points over the previous quarter, from 3.5 per cent to 4.4 per cent. It also noted the plans covered by the report have generated an average return of 22.6 per cent on investments since the first quarter of 2020.
Inside portfolios, the strong performance of Canadian equities helped to raise the overall average returns for Canadian DB pensions, according to the report, which found Canadian equity returns averaged 7.9 per cent during the quarter and 17.3 per cent during the first six months of 2021.
Read: Canadian pension returns up during Q2, buoyed by global equities: reports
Returns on foreign equities were hampered by the strength of the Canadian dollar during the second quarter, with average returns averaging 5.2 per cent during the second quarter and 9.3 per cent for the first six months of the year.
And fixed income averaged returns of three per cent during the quarter for the Canadian DB plans covered in the report. In year-to-date terms, however, average fixed income returns were down by about five percentage points.
Read: Institutional investors turning to equities, global markets in 2021