Just like their Australian superannuation counterparts, Canadian pension plans have taken a hit as a result of the market volatility, according to the latest data released by RBC Dexia Investor Services.
The data, released this week, said Canadian pension plans suffered their largest quarterly loss in a decade in the September quarter. Pension plans suffered an 8.6 per cent decline in the three months before September 30.
Don McDougall, the director of advisory services for RBC, said: “Year to date, Canadian pensions are down 10.1 per cent. It hasn’t been pretty, and judging by the performance in October so far, the situation is not getting any better.”
Canadian equity plunged 18.2 per cent as commodity prices dragged down the resource-heavy S&P TSX Composite Index, while energy stocks lost 28.3 per cent and materials plunged 33.6 per cent.
McDougall explained that Canadian funds outperformed the index by 1.7 per cent due to their “trimmed exposure” to resources and by locking in gains made earlier in the year.
In domestic bonds, Canadian pensions dipped 1.5 per cent in the quarter, below the 0.4 per cent dip in the DEX Universe broad market benchmark. Global equities fell 11.2 per cent, while the MSCI EAFE index dropped by 16.8 per cent over the third quarter, its biggest drop in 18 years.
