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RBC Investor Services (RBCIS) reported that Canadian defined benefit (DB) pension plans under its administration posted a median return of 0.4% in the first quarter of 2026 amid heightened geopolitical tensions and sharp sector divides, with Energy surging while Information Technology declined.
"Canadian pension plans faced a challenging three months, marked by sharp divergence in sector returns," said Isabelle Tremblay, Director, Client Solutions and Asset Owner Lead, RBCIS. "While technology holdings weighed on results, exposure to Canadian energy and materials provided crucial downside protection. The strong showing of domestic resource sectors helped moderate losses that would have been significantly deeper with purely international portfolios."
Client plans' Canadian equity allocations returned 3.9% in the quarter, matching the TSX Composite Index. Energy led sector gains with a 30.1% surge following the Strait of Hormuz closure, while Materials rose strongly early in the period, pulled back significantly in March and finished with a 10.7% gain. March marked a turning point for Information Technology as well: after falling sharply in January and February, the sector partially recovered to end down 22.5%.
On the global equity side, client plans returned -0.9%, outperforming the MSCI World Index's 1.8% drop as active management and tactical positioning cushioned losses. U.S. equities slipped 2.6% (S&P 500 Index), dragged down by the Information Technology pullback. Value stocks significantly outperformed growth across indices, with MSCI World Value gaining 3.0% versus MSCI World Growth's 6.8% decline. Emerging markets returned 1.6% (MSCI Emerging Markets Index), though this modest gain masked significant volatility throughout the period. The index surged 14.3% in January and February, led by Taiwan and Korea on AI-related technology strength, before retreating 11% in March as the Middle Eastern conflict drove energy costs higher, weighing on energy-importing nations.
Fixed income allocations returned 0.2% in Q1, matching the FTSE Canada Universe Bond Index. Bonds across all maturities gained ground in January and February before pulling back in March amid renewed inflation concerns. Long-term bonds experienced the sharpest pullback, dropping 3.6% in the final month to finish the period flat. The Bank of Canada maintained its overnight rate at 2.25% during Q1, signaling continued caution as it weighed conflicting inflation and growth data.
About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 101,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 19 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.‎
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About RBC Investor Services
RBC Investor Services delivers investment servicing solutions to Canadian asset managers and asset owners, insurance providers, investment counsellors and global financial institutions. With more than 1,800 employees and offices across the globe, our focus is on safeguarding the assets of our clients and enabling their growth. Part of Royal Bank of Canada, Canada's largest bank, RBC Investor Services has over C$2.9 trillion of assets under administration. Learn more at rbcis.com.
Media Contact:
Ylana Kurtz, RBC Investor Services
SOURCE RBC Investor Services
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