CANADA - Canadian balanced pension funds saw returns of 2.2% in the first quarter of 2005, but the decline in long bond yields have increased overall pension fund liabilities, according to Mercer Investment Consulting.
Pooled pension fund performances “have been like a dance routine - one step forward, one step back,” said Peter Muldowney, principle for Mercer Investment Consulting. “The step forward represented by the positive returns by balanced funds, but the step back due to the offsetting decline in long bond yields.”
Canadian equities posted the highest performance in the first three months of 2005, with the S/TSX Composite index showing 4.4% returns. Canadian equity managers outperformed the index by an average of 0.5%. Large cap stocks were the best performers, while small cap stocks were the worst performers.
Canadian bonds’ median return matched the Scotia Capital Universe at 1.1%, while the Scotia Capital Long Term index returned 2.1% over the first quarter. International equities returned 0.9% in Canadian dollar terms, according to the MSCI EAFE index. The average Canadian international equity manager outperformed that by 0.1%.
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