Canadian DB plans post best quarterly gains of 2025, fuelled by gold, tech, and falling rates
Canadian defined-benefit (DB) pension plans under RBC Investor Services (RBCIS) administration posted their strongest quarterly performance of 2025, with a 4.4 percent median return in the third quarter.
This result was driven by an uncommon simultaneous surge in both equities and fixed income. Year-to-date (YTD) growth reached 7.1 percent.
Isabelle Tremblay, director, Client Solutions, and Asset Owner Segment lead at RBCIS, described the third quarter of 2025 as “unusual in that both equities and fixed income advanced at the same time.”
She explained, “We can attribute the equity returns to resilient corporate earnings, AI-driven productivity and strong deal-making.”
Tremblay also noted that “gains were especially strong among gold producers, as investors continued to look for stability and diversification through traditional safe-haven assets.”
Canadian equities delivered standout results, with client pension plans yielding a 9.5 percent return for the quarter and 21.5 percent YTD, sustaining the momentum from the previous quarter.
The S&P/TSX Composite Index climbed 12.5 percent in Q3, reaching a 23.9 percent YTD return.
The Materials sector led the charge, surging 37.8 percent for the quarter and 79.3 percent YTD, fuelled by gold producers such as Agnico Eagle and Barrick, which benefited from higher bullion prices and robust quarterly earnings.
Other sectors with notable gains included Information Technology (13.2 percent), Energy (12.6 percent), and Financials (10.6 percent).
US equities also contributed to the positive results.
The S&P 500 Index (CAD) advanced 10.3 percent in the third quarter and 11.1 percent YTD, with a weaker Canadian dollar amplifying returns through favourable currency translation.
Information Technology and Communication Services sectors posted gains of 15.4 percent (18.3 percent YTD) and 14.2 percent (20.5 percent YTD), respectively, supported by strong earnings from the “Magnificent 7” technology companies.
Consumer discretionary stocks added 11.7 percent for the quarter.
Global equities maintained their upward trajectory, with client plans returning 8.7 percent for the third quarter and 14.5 percent YTD.
The MSCI World Index (CAD) rose 9.4 percent for the quarter and 13.6 percent YTD.
Fixed income allocations also strengthened overall portfolio performance.
Client plans’ fixed income assets returned 1.5 percent for the quarter and 2.1 percent YTD.
The FTSE Canada Overall Bond Index increased by 1.5 percent for the quarter and 3.0 percent YTD, with medium-term bonds delivering the highest returns at 2.0 percent for the quarter and 4.4 percent YTD.
“The Bank of Canada’s decision to reduce its key interest rate by 0.25 percent on September 17 encouraged fixed income investors, with lower yields supporting broader portfolio outcomes,” Tremblay noted.
