Northern Trust Canada experienced a strong equity performance in Q2 2020 that allowed Canadian-defined benefit plans to recover most of their investment losses from the first few days of the COVID-19 pandemic.
This was tracked by the Northern Trust Canada Universe, which monitors the performance of Canadian institutional investment plans that are subscribed to Northern Trust’s asset servicing measurement services.
Following the initial days of the global pandemic, major equity markets responded “favourably” with stimulus packages to curb the effects of geopolitical and trade tensions.
Canadian equities saw a return of 17 percent for Q2, with many sectors projecting healthy gains. In addition, US equities gained 15.3 percent in cash available for distribution (CAD).
In total, international developed markets ended the quarter with a 10.1 percent increased return on CAD.
As measured by the FTSE Canada Universe Bond Index, the Canadian fixed income market returned 5.9 percent, mainly owing to corporate bonds that outpaced the government and provincial segments.
Katie Pries, president and CEO of Northern Trust Canada, commented: “Despite the level of volatility witnessed over the last several months, Canadian pension plans are tracking in a positive direction, with the median plan in the Northern Trust Canada Universe generating a solid 9.9 percent gain for Q2.”
“Although there still remains a heightened level of uncertainty in the current environment as the pandemic continues to run its course, plan sponsors continue to persevere as they navigate on a path to sustainability.”
