RBC Investor & Treasury Services Survey: Canadian pensions end on a strong note in 2013 - FOX Carolina 21

RBC Investor & Treasury Services Survey: Canadian pensions end on a strong note in 2013

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SOURCE RBC

TORONTO, Jan. 22, 2014 /CNW/ - Canadian pension plans posted solid gains in 2013 as global equity markets continued to surge during the fourth quarter, according to the latest survey from RBC Investor & Treasury Services.

Within the $460 billion RBC Investor & Treasury Services All Plan universe - the industry's most comprehensive universe of Canadian pension plans - defined benefit (DB) pension assets returned 6.1 per cent during the three months ending December 31, 2013, bringing annual gains to 14.2 per cent.

"Pensions gained a lot of traction in 2013," said Scott MacDonald, Managing Director, Pensions for RBC Investor & Treasury Services. "Strong equity gains and a weaker Canadian dollar led to an increase in assets, while higher long term bond yields reduced most plan liabilities, which will please sponsors."

Foreign equity was the top performing asset class, rising 11.5 per cent in the fourth quarter while bringing full-year results up 35.8 per cent - ahead of the MSCI World Index by 0.6 per cent. "Currency gains accounted for approximately 20 per cent of the returns, but strength was spread across the majority of developed markets. The U.S. contributed the most, with the S&P 500, up 41.3 per cent, having its best calendar year result in Canadian dollar terms since 1958," added MacDonald.

Domestic stocks also helped, advancing 19.4 per cent for the year, but were held back by the materials sector which continued to show weakness in the fourth quarter and subsequently shed close to 30 per cent of its value since the beginning of 2013. "2013 was a really good year for active Canadian equity management," said MacDonald. "Most pensions maintained an underexposure to the sector and consequently outperformed the S&P/TSX Composite Index by 6.4 per cent during the year."

Canadian pensions however had their largest annual fixed income decline since 1994, losing 1.3 per cent over the last 12 months. "The weakness spread across the market, but inflation-sensitive longer-duration bonds were the most affected as the DEX Real Return Bond Index declined 13.1 per cent while DEX Long Term Bonds were down 6.2 per cent," noted MacDonald. "In this environment, the risk mitigating liability driven strategies were the hardest hit on the asset side."

About RBC Investor & Treasury Services
RBC Investor & Treasury Services (RBC I&TS) is a specialist provider of asset servicing, custody, payments and treasury services for financial and other institutional investors worldwide. We serve clients from 18 locations across North America, Europe and the Asia Pacific region. We deliver custodial, advisory, financing and other services to safeguard clients' assets, maximize liquidity and manage risk in multiple jurisdictions. RBC I&TS is ranked among the world's top 10 global custodians, with $ 3.2 trillion in client assets under administration (as at December 05, 2013).

About RBC
Royal Bank of Canada (RY on TSX and NYSE) is Canada's largest bank and one of the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, investor services and capital markets products and services on a global basis. We employ approximately 79,000 full- and part-time employees who serve more than 15 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 44 other countries. For more information, please visit rbc.com.

RBC supports a broad range of community initiatives through donations, sponsorships and employee volunteer activities. In 2012, we contributed more than $95 million to causes worldwide, including donations and community investments of more than $64 million and $31 million in sponsorships.

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© Royal Bank of Canada 2013. RBC Investor & Treasury Services™ is a global brand name and is part of Royal Bank of Canada. RBC Investor & Treasury Services is a specialist provider of asset servicing, custody, payments and treasury services for financial and other institutional investors worldwide. RBC Investor Services™ operates through two primary operating companies, RBC Investor Services Trust and RBC Investor Services Bank S.A., and their branches and affiliates.  In the UK, RBC Investor Services Trust operates through a branch authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

These materials are provided by RBC Investor & Treasury Services (RBC I&TS) for general information purposes only. RBC I&TS makes no representation or warranties and accepts no responsibility or liability of any kind for their accuracy, reliability or completeness or for any action taken, or results obtained, from the use of the materials. Readers should be aware that the content of these materials should not be regarded as legal, accounting, investment, financial, or other professional advice, nor is it intended for such use.

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