Canadian DB plans returned 9.2% amid volatile 2020

Despite pandemic uncertainty, Canadian defined benefit pension plans returned 9.2% last year, according to a report from RBC Investor & Treasury Services.

Global equities posted solid gains in the fourth quarter, led by the energy and financials sectors. RBC reported that value stocks outperformed growth stocks in Q4, although growth stocks “far outdistanced” value stocks for the year.

Canadian equities returned 9.4% in Q4 and 4.1% overall in 2020, compared with returns of 9% and 5.6%, respectively, for the TSX composite index.

Canadian tech stocks, led by Shopify, returned 80.7% last year, while the materials sector returned 21.2% and consumer discretionary returned 17.1%.

Energy had the poorest performance of any Canadian sector last year, losing 26.6%.

Foreign equities returned 12.6% overall in 2020, compared with 13.9% for the benchmark MSCI world index.

Domestic bonds returned 11.1% for the year (and 1.1% in Q4), compared with a return of 8.7% for the FTSE TMX Canada universe bond index for 2020.

“It’s been a tumultuous time for the markets, but we’re seeing positive returns for a third consecutive quarter,” David Linds, managing director and head of asset servicing, Canada, with RBC Investor & Treasury Services, said in a release. “The successful development of multiple Covid-19 vaccines was a contributing factor, as were the anticipated government support packages and the conclusion of the U.S. elections.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.