CANADA - Canadian balanced funds have posted a solid 3.2% gain for the second quarter, lifting one-year results to 11.3%, a new survey by RBC Global Services has found.
BENCHMARK(R), the investment analytics arm of RBC, claimed the results of the survey was due to “a resilient bond market” coupled with firm energy prices.
Commenting on the findings, Don McDougall, director, BENCHMARK, RBC Global Services, said Canadian pension plans had gained “momentum” throughout Q2, with bonds leading the way.
He said: “The recent buoyancy of the bond market defies conventional wisdom, as rising interest rates normally depress prices.
“Fixed income managers were unexpectedly caught offside and under performed by almost 20 basis points for the quarter.”
Canadian equities fared well as oil prices surged to a record-high $60/barrel, propelling the S TSX Composite Index for the second consecutive quarter.
“Energy accounted for three-quarters of the 3.6% stock market gain. Remarkably, equity managers kept pace, despite being under-exposed to the soaring energy sector by 1.8%,” added McDougall.
“Over the last year, actively managed Canadian equity portfolios are up a whopping 19.5%, surpassing the broad market index by 1.5% thanks to superior stock-picking in eight of the ten major sectors.”
Global equities remained the worst-performing asset class, gaining 1.3% in the latest quarter - but lagging behind the MSCI World Index by 0.5% in Canadian dollar terms.
Additionally, the Scotia Capital Universe Bond Index climbed 4.5% in the quarter - despite two consecutive US Federal Reserve hikes and the Bank of Canada's stated desire for higher interest rates.
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