Canadian defined benefit plans generated “modest investment gains” in Q2 2019, with the median plan posting a return of 2.5 percent for the quarter, according to data from the Northern Trust Canada Universe.
The plans recorded a second consecutive quarter of positive performance despite a stock market sell-off in May due to concerns over US-China trade talks and weaker global growth.
In addition, escalating US-China trade tensions caused emerging market stocks to lag against their developed market counterparts.
Trade and global growth concerns contributed to equity volatility in major developed markets, and the US Federal Reserve signalled the possibility of interest rate cuts in the near future, after refraining from a rate cut in June.
US equity markets buoyed by strong GDP growth, consumer spending and expectations for future interest rate cuts pushed market indices to new records with the S&P 500 returning 2 percent in CAD (4.3 percent in USD).
Economically-sensitive stocks, including those from information technology, generally performed stronger than defensive stocks.
The Northern Trust Canada Universe tracks the performance of Canadian institutional investment plans that subscribe to performance measurement services as part of Northern Trust’s asset servicing offerings.
Arti Sharma, president and CEO of Northern Trust Canada, said: “In the midst of uncertainty surrounding trade policies coupled with a mixed economic climate, Canadian pension plans continue to generate positive investment returns in Q2 2019.”
