The market value of Canadian trusteed pension funds grew strongly in the first quarter of 2017 (Q1 2017), powered by robust stock market gains, according to data published on Wednesday from Statistics Canada.
Asset levels rose by 4.2% from Q4 2016 to more than $1.8 trillion. Compared with the Q1 2016, assets were up by 10.5%. Equity assets rose by 5.0% in Q1 2017, and bond assets were up by 0.7%. As well, the value of pensions’ mortgage investments surged by 12.9% from the prior quarter.
Canadian pension funds also increased their exposure to foreign assets in Q1 2017. Investments in foreign stocks increased by 8.0% during the quarter to $304.7 billion, which follows a 4.2% gain in Q4 2016. Pensions’ foreign bond holdings increased by 23.9% during Q1 2017 to $76.6 billion, reversing a 6.7% decline in Q4 2016.
Pension fund revenue declined by 14.8% in Q1 2017 to $48.3 billion, as investment income dropped 32.6% from Q4 2016, and revenue from contributions declined by 15.9%. At the same time, pension expenditures decreased by 5.6%, which partially offset the decline in revenue. Nevertheless, net income dropped from $34.3 billion in Q4 2016 to $27.2 billion in Q1 2017.