CANADA - The financial position of Canadian pension funds was lifted by the strong performance of domestic equities during the third quarter, according to Mercer.
Mercer Investment Consulting Canadian business leader Peter Muldowney said balanced fund managers in the country performed fairly well in Q3, achieving a median return of 4.1%.
“Pension fund liabilities will have remained fairly stable last quarter, as Canadian long bond yields hardly shifted,” he said.
“Their assets, on the other hand, enjoyed a boost through excellent Canadian equity performance. Overall, this had a positive impact on the health of Canadian pension funds.”
According to Mercer’s pooled fund survey, Canadian equities were the strongest-performing asset class in the third quarter, as shown by the S&P/TSX Composite index, which returned 11.6% during this period.
All major styles and market caps had strong positive returns, while large cap stocks were the strongest performers, with the S&P/TSX 60 returning 12.2% during the period. This picture is reflected in Mercer’s Canadian Pension Health Index - an indicator of the impact of capital markets on the financial position of Canadian pension plans – which was 81% at the end of September 2005, up from 79% at the end of June this year but down from 84% at the end of December 2004.
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