Press release
Northern Trust Pension Universe Data: Canadian Pension Plans Carve out Positive Q2 Returns Amidst Inflationary Headwinds
TORONTO--(BUSINESS WIRE)-- Canadian Pension plan investment returns concluded the first half of the year in a position of strength, according to the Northern
About this update from Northern Trust Corporation
[{"type":"text","content":" TORONTO--(BUSINESS WIRE)--\nCanadian Pension plan investment returns concluded the first half of the year in a position of strength, according to the Northern Trust Canada Universe. The median Canadian Pension Plan returned 1.0% for the quarter ending June 30 and 5.3% year-to-date.\n\n\nThe Northern Trust Canada universe tracks the performance of Canadian institutional defined benefit plans that subscribe to performance measurement services as part of Northern Trust’s asset service offerings.\n\n\nThe second quarter of 2023 witnessed a resilient global economy against a backdrop of sticky inflation, higher interest rates, concern about distress in the banking sector and a looming debt ceiling in the U.S. Although fears of banking problems subsided and a U.S. government borrowing resolution was achieved, persistent inflation and tight labor markets weighed on the minds of global monetary authorities. Many major central banks around the world continued a restrictive path, while in North America a recalibration effort appeared to be underway. The U.S. Federal Reserve took a pause in June from hiking rates only to assess the productivity of its tightening journey over the last year. The Bank of Canada (BoC) reinstituted an interest rate hike in the quarter following an abbreviated pause over the last three months, as it strives to relieve pricing pressures that have rippled across the economy. Resiliency held firm, enabling global developed equity markets to close the quarter on a higher note, while bond returns weakened as yields rose.\n\n\n“The first half of 2023 presented many challenges in the financial markets with the primary focus on the battle against inflation. In this environment, pension plans have benefited from a growing trend towards alternative investments, given the diversification and underlying hedging feature embedded in this asset class. As we wait for the inflation pendulum to swing back to more normalized levels, higher interest rates continue to provide a cushion for the funding health of Canadian Pension Plans,” said Katie Pries, President and CEO of Northern Trust Canada.\n\n\nThe strength of corporate and consumer balance sheets remained supportive of economic growth in the second quarter, enabling financial markets to look past the headwind of a lingering inflation cloud and restrictive monetary path. Glo...