Canadian defined benefit pensions eked out a 0.4% return for the first quarter of 2026 as geopolitical tensions and the war in the Middle East roiled markets during the period, according to data from RBC Investor Services and Northern Trust.
RBC Investor Services reported that Canadian defined benefit pension plans under its administration registered a 3.9% return for equities. Energy stocks led the equity performance with gains of 30.1% after the Strait of Hormuz closure, while materials rose 10.7%. Meanwhile, the returns were weighed down by sharply falling technology stocks, which ended the quarter 22.5% lower.
Fixed-income allocations returned 0.2% for the first quarter, matching the FTSE Canada Universe Bond Index, as the Bank of Canada maintained its overnight lending rate at 2.25%.
“Canadian pension plans faced a challenging three months, marked by sharp divergence in sector returns,” Isabelle Tremblay, RBC Investor Services’ director of client solutions and its asset owner lead, said in a statement. “While technology holdings weighed on results, exposure to Canadian energy and materials provided crucial downside protection.”
Northern Trust reported that domestic equity investments for defined benefit plans that subscribe to its performance measurement service rose 3.9% in the first quarter. The energy sector outpaced all sectors, spurred by soaring oil prices, while the asset manager’s clients benefited from the materials and utilities sectors, which also rang up double-digit returns. IT was the largest decliner, down more than 22%, while health care and real estate also performed weakly during the quarter.
According to Northern Trust, U.S. equities—as measured by the S&P 500 Index—fell 2.6% in Canadian dollar terms for the quarter. The firm added that financials, consumer discretionary and information technology posted the weakest results over the period.
International developed markets investments gained 0.7% in Canadian dollars for the quarter, also led by the energy sector, while international developed consumer discretionary investments ended the quarter with double-digit losses.
“Economies have remained resilient while navigating through what has been undoubtedly a tumultuous landscape,” Katie Pries, Northern Trust Asset Servicing’s country executive for Canada, said in a statement.
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Tags: Canada