After years of strong performance, the long-term outlook for equities is becoming more muted, says August Cruikshanks, an investment consultant in Eckler Ltd.’s pension and benefits consulting practice.
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At the start of 2025, Eckler’s 20-year expected return for Canadian equities was 6.6 per cent, the same as the U.S. market, he said. The expectation is examined twice per year, but it doesn’t significantly change.
In 2025, Canadian institutional investors saw increasing scrutiny from U.S. President Donald Trump toward Canada, starting with an increasingly icy relationship, volatile trade demands and invitations to become a part of the country.
The tense relationship between the two countries pushed some investors to reconsider their entire approach to the U.S. and, in 2026, Cruikshanks expects it to continue. “It wasn’t just a blip. I think that’s something that that is going to be persistent here for a while.”
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In multiple conversations with pension funds, he sees a continued interest for investors to pursue more Canadian-based investment managers. However, in the long run, Canadian equities face increased risk from reliance in commodities, making it favourable for investors to diversify outside of Canada in the equities space.
“But now [investors] have to counterweight, . . . this idea that, ‘We can’t be [seen] to be investing the capital that we’ve been entrusted with in regions and companies that are working against our interests in some ways.’”
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Normandin Beaudry’s 2025 third-quarter pension index noted equities saw favourable returns from the ongoing surge in technology and artificial intelligence trends, which has pushed forward concentration in global stock market indices.
Cruikshanks sees concentration risks for investors in the U.S., Canada and even emerging markets. Some pension funds are looking more closely at passive exposures, he adds, because of the group performance from concentration accompanied by underperformance trends by active managers.
Canadian investors, he says, are trying to figure out the best strategic allocations across asset classes and how to best leverage active management in the face of “historically high levels” of concentration.
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