Value of assets in trusteed pension funds down 3.3% in Q1: Stats Can

The value of assets held by Canadian trusteed pension funds fell 3.3 per cent to $2.02 trillion in the first quarter of 2020, according to new data from Statistics Canada.

Despite the quarterly drop, the funds posted a year-over-year increase of 2.5 per cent. Statistics Canada’s update noted the overall decrease in the quarter was mitigated by the performance of the largest 10 funds, which hold nearly 50 per cent of the total assets and whose market value fell an average of just 1.5 per cent.

“The onset of COVID-19 affected the market value of assets held by Canadian trusteed pension funds,” it said. “However, the decrease in value was not as sharp as the 21.6 per cent drop in the [S&P/TSX composite index] in the first quarter. The smaller declines in pension fund assets can likely be attributed to active management and the diversification of their holdings.”

Read: Value of assets in trusteed pension funds up 3% in first quarter: Stats Can

Looking by assets type, short-term investments were up by nearly a third (29.7 per cent), followed by mortgages (one per cent), real estate (0.7 per cent) and bonds (0.3 per cent). On the other hand, stocks were down sharply, at negative 15.7 per cent, while other assets declined 1.1 per cent.

For domestic holdings, the total value of assets edged up 1.2 per cent in the quarter, while the value of short-term Canadian assets rose by 34.6 per cent, more than offsetting the 17.7 per cent drop in stock holdings. Year over year, domestic assets were up 5.6 per cent, with every category except stocks (down 16.7 per cent) reporting gains. Foreign assets were down 11.4 per cent during the quarter and down 3.1 per cent year over year.

While Canadian trusteed pension funds posted $35.2 billion in net income in the last quarter of 2019, that was reversed dramatically in the first quarter of 2020, with a loss of $6.1 billion.

Comparing trusteed plans in the public and private sectors, both were down in the quarter, at negative 3.2 per cent and negative 3.7 per cent, respectively. Nevertheless, assets held by the public sector were up 3.1 per cent year over year, while those held by the private sector stood 1.2 per cent higher.

Read: Assets in trusteed pension funds down slightly in third quarter of 2017: Statistics Canada