CANADA - The high value of the Canadian dollar has again caused problems for pension funds and other institutional investors, according to a report by RBC Dexia Investment Services (RBC DIS).
Canadian pensions were down 0.7% in value at the end of the third quarter, marking only 1.8% growth on the year to date. This was exacerbated by a 17% rise in the value of the Canadian dollar against the US.
In the second quarter of 2007 RBC DIS quoted the Canadian dollar as appreciating almost 8% against a basket of world currencies, including 13.2% against the Japanese yen.
Canadian pension funds have typically invested around half their assets in foreign equities, which has made exposure to foreign exchange a key concern for pension trustees and plan sponsors.
However, Canadian pension funds are up 11.3% on the year so far, marginally outperforming the RBC DIS benchmark.
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