CANADA - Bolstered by strong fourth quarter performances, pension funds saw returns of 10.1% in 2004, according to RBC Global Services.
Balanced funds earned 5.3% in the fourth quarter of 2004, according to a survey of pension plans and money managers by Benchmark, the investment analytics arm of RBC Global Services.
“This year, as last year, markets rallied in the final quarter,” said Don McDougall, director of Benchmark. “Half the annual gains were concentrated in those final three months - a strong finish. However, 2004 did not quite match the 13.5% annual return posted in 2003.”
Overall last year, Canadian equities were the strongest performer, returning 15.7% in 2004. Canadian fixed income managers also had a healthy year, averaging 7.2% thanks to low interest rates, McDougall said.
“2004 ws not just about equities,” he said. “Low interest rates buoyed domestic bonds.”
But currency appreciation of the Canadian dollar, particularly against the US dollar, hurt foreign equities, reducing their returns to 6.5%
Meanwhile, a separate survey found that while 66% of Canadians want to retire before they turn 65, 79% do not have a retirement plan. RBC Financial Group, the parent company of RBC global Services, found that only 31% have figured out how much money they need to have a comfortable retirement.
However, 2004 contributions to Registered Retirement Savings Plan were C$5,560, double what they were 12 years ago.
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