With global and domestic equities rallying in the first quarter of 2019, Canadian defined benefit plan returns were lifted to 7.2 per cent in the first three months of the year, according to RBC Investor and Treasury Services’ universe of DB pension plans.

This compares with a negative return of 3.5 per cent for the fourth quarter of 2018.

In the first quarter of the year, Canadian equities posted a return of 12.4 per cent compared to a loss of negative 10.6 per cent for the last quarter of 2018, while the S&P/TSX composite index posted a 13.3 per cent return in Q1 2019, compared to negative 10.1 per cent in Q4 2018.

Global equities saw a similar upward trend, returning 10 per cent in the first quarter of 2019, reversing Q4 2018 losses of negative 7.8 per cent. Meanwhile, the MSCI world index also pushed higher, returning10 per cent in Q1 2019, in contract to its negative 8.5 per cent return in Q4 2018.

Canadian fixed income returns jumped to 5.6 per cent, up from 1.8 in Q4 2018. Long-term bonds, in particular, helped propel returns for the quarter. The FTSE Canada universe bond index also forged ahead in Q1 2019, posting a return of 3.9 per cent, up from 1.8 per cent in Q4 2018.

“Canadian defined benefit pension plans started 2019 in positive territory as the TSX reached an all-time high, reversing many of the 2018 losses, but asset managers will need to remain vigilant as we head toward the mid-year mark,” said David Linds, managing director and head of Canadian asset servicing at RBC Investor and Treasury Services, in a press release.

“Many of the underlying concerns, including trade wars, slowing global economic growth as well as ongoing geopolitical unrest are still very relevant and will force asset managers to re-examine their portfolios and risk exposure.”