Thanks to foreign assets, pensions gained in Q3

Boosted by returns on foreign assets, pension fund assets rose in the third quarter of 2022, Statistics Canada reports.

The market value of pension fund assets increased by 2.3% to around $2.1 trillion, a gain of $46.8 billion, StatsCan said.

Each of the five largest asset classes — bonds, equities, real estate, infrastructure and “other” assets — saw their value rise in the third quarter, the agency reported.

The strongest returns were in the alternative asset classes, whereas bond assets were up 0.6% and equities gained 0.9%.

The gains all came in foreign assets too, StatsCan said.

Canadian bonds and equities were both down in the quarter, driving a 0.4% decline in domestic assets overall, while foreign assets gained 3.4%.

On an annual basis, pension assets were down by 1.8% in the third quarter, as domestic assets declined by 5.8%, outpacing the 0.9% increase in foreign assets.

StatsCan also reported that pension fund revenues dropped by 20.5% in the third quarter, “mainly because of net realized losses on fixed income investments and financial derivatives.”

While expenditures also declined in the third quarter, pension funds posted a net loss of $5.4 billion in the quarter, the agency said. This marked an increase from a net loss of $3.4 billion in the previous quarter.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.