Northern Trust Pension Universe Data

Canadian Pension Plans Buoyed by Positive Momentum in Equity Markets During Fourth Quarter 2020

Robust equity markets provided a solid foundation for Canadian pension plans during the fourth quarter of 2020, with the median Canadian plan returning 5.0% for the quarter and closing a volatile year with a 10.0% gain, according to the Northern Trust Canada Universe.

During the last quarter of the year, major global economies continued to feel the impact as the coronavirus renewed its path around the world. Despite the headwinds of the pandemic, global equity markets generated healthy positive returns as investors welcomed the relief of further fiscal stimulus and the long-awaited approval of vaccines.

“The global pandemic undoubtedly was the focal point over the last year, but 2020 also symbolized a period of leadership, adaptation and resiliency,” said Katie Pries, President and CEO of Northern Trust Canada. “Monetary and fiscal leaders were challenged with seeking unprecedented solutions for economic and financial relief. Many Canadians were confronted with pivoting from a traditional work setting to a virtual work from home environment. Canadian pension plan sponsors faced the difficult task of navigating through an extraordinary and unpredictable period in history, while safeguarding plan assets for future retirement. This test of resiliency was met with solid performance.”

The Northern Trust Canada Universe tracks the performance of Canadian institutional investment plans that subscribe to performance measurement services as part of Northern Trust’s asset service offerings.

Pockets of uncertainty marked the fourth quarter, ranging from a U.S. Presidential election and Brexit negotiations to the growing need for further stimulus and the second wave of the coronavirus. Equity markets navigated through these obstacles, as optimism surrounding additional fiscal stimulus and the approval and roll-out of vaccines ultimately prevailed. Major central banks around the globe continued to maintain an accommodative stance which further complemented this optimism. Despite the year beginning with a very weak and volatile first quarter, major equity indices closed 2020 with strength and momentum, generating attractive positive returns.