With global equities rebounding after a volatile end to 2018, Canadian defined benefit pension plans posted positive returns in the first quarter of 2019, according to new data by Northern Trust Corp.

The Northern Trust Canada Universe, which tracks the performance of Canadian institutional investment plans using the firm’s asset servicing offerings, found Canadian plans posted a median return of 7.3 per cent in the first quarter of 2019, compared to the previous quarter’s return of negative 3.5 per cent.

“The U.S. Federal Reserve acted as a catalyst to the rebound by taking a dovish position on its monetary policy, allowing global equity markets to rise,” said Arti Sharma, president and chief executive officer of Northern Trust Canada, in a press release. “Constructive trade talks between the U.S. and China further fueled investor confidence.” 

Read: ‘Worst calendar year performance’ for U.S. institutional plans since 2008: report

In the first quarter of the year Canadian equities, as measured by the S&P/TSX composite index, posted a return of 13.3 per cent. All sectors were led by health care, with a return of 49.1 per cent for the quarter, which Northern Trust attributed to the rally in cannabis stocks. And while Canada’s energy sector remained weak, Alberta’s mandatory production cuts pushed the sector to a gain of 15.6 per cent in the first quarter. 

U.S. equity markets also saw a lift in the first quarter, with the S&P 500 index recording a return of 11.2 per cent in Canadian dollars, while the MSCI EAFE index returned 7.7 per cent and the MSCI emerging market index returned 7.6 per cent.

Read: Canadian DB pension returns boosted by rallying equities in Q1 2019

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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