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Canadian pensions rode commodity boom and emerging markets surged to outpace global indices in 2025

By The Northwire Desk — AI Analysis Jan 30, 2026 · 10:05 RY · 227.52 ROYAL BANK OF CANADA
RY · Price

Executive Summary

  • RBC Investor Services reported that Canadian defined‑benefit pension plans delivered strong returns in 2025, with a full‑year median return of 7.9% (up from 11.3% in 2024) and Q4 median return of 0.6%.
  • Canadian equities in client plans posted a 31.1% annual gain, driven by a 100.6% surge in the Materials sector and a 35.3% rise in Financials, marking the TSX’s best year since 2009.
  • Emerging‑market exposure outperformed global peers, with the MSCI Emerging Markets Index delivering a 27.3% annual return—its first time beating the MSCI World index since 2020.

Key Details

  • Median Returns – Canadian DB Plans: Q4 2025 = 0.6%; Full‑year 2025 = 7.9% (vs. Q4 2024 = 1.6%; FY 2024 = 11.3%).
  • Equity Performance – Canadian Client Plans: Q4 2025 = 6.1%; FY 2025 = 31.1% (vs. Q4 2024 = 3.2%; FY 2024 = 21.2%).
  • TSX Composite Index: Q4 2025 + 6.3%; FY 2025 + 31.7% – best annual performance since 2009.
  • Sector Drivers: Materials sector +100.6% YoY; Financials sector +35.3% YoY (2025).
  • Global Equity Performance – Client Plans: Q4 2025 = 1.4%; FY 2025 = 16.7% (vs. Q4 2024 = 4.1%; FY 2024 = 24.1%).
  • MSCI World Index: Q4 2025 + 1.6%; FY 2025 + 15.4% (down from 2024).
  • S&P 500 Index: Q4 2025 + 1.1%; FY 2025 + 12.4%.
  • MSCI Emerging Markets Index: FY 2025 + 27.3% – first time outpacing MSCI World since 2020.
  • Currency Impact: Canadian dollar appreciated 4.7% vs. USD in 2025, reducing returns on unhedged U.S. equities; loonie weakened vs. EUR, boosting European exposure gains.
  • Fixed‑Income Performance – RBCIS Client Plans: Q4 2025 −0.6%; FY 2025 +1.4% (vs. FTSE Canada Universe Bond Index Q4 −0.3%, FY +2.6%).
  • Bond Allocation Effect: Heavy weighting to long‑term bonds (down 1.4% Q4, −0.7% FY) drove underperformance; shorter‑term bonds posted +0.3% in Q4, mid‑term bonds were best for the year (+4.0%).

Notable Quotes

  • “Canadian pension plans navigated a year of stark contrasts in 2025, leveraging domestic equity strength amid global volatility,” – Isabelle Tremblay, Director, Client Solutions, Asset Owner Segment Lead, RBCIS.
  • “Geopolitical tensions and U.S. Federal Reserve uncertainty boosted safe‑haven demand, while emerging markets demonstrated remarkable resilience, further shaping the strategic choices of pension plans,” – Isabelle Tremblay.
Read the original news release →

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