Quarterly performance of Canadian Pension Plan investments improved, attributed to equity markets recovering from the impact of tariff disturbances, as reported by Northern Trust Pension Universe Data.
Canadian Pension Plans Show Modest Gains Amid Trade Uncertainty
Canadian pension plans posted modest positive returns in the second quarter of 2025, amid ongoing tariff and trade uncertainties. According to Northern Trust Canada data tracking defined benefit plans, the median return was 0.6% for the quarter and 1.8% year-to-date.
The strong performance was primarily driven by the equity markets, with Canadian equities leading the way. The S&P/TSX Composite Index advanced by 8.3% to 8.5%, with the Information Technology and Consumer Discretionary sectors posting the strongest returns. On the international front, the MSCI EAFE Index gained 6.2%, the S&P 500 Index rose 5.2%, and the MSCI Emerging Markets Index generated 6.4%.
However, the Canadian fixed income market faced challenges due to rising yields, with the FTSE Canada Universe Bond Index declining about 0.6%.
Despite the volatility caused by trade uncertainties, especially related to U.S. policy shifts, pension plans managed to achieve reasonable returns. Wage growth remained above inflation, personal savings rates were healthy, and banks managed credit losses, supporting some economic resilience amid global tensions. The Canadian dollar also appreciated over 5% relative to the U.S. dollar in Q2 2025.
Plans with a strong equity allocation, such as foundations and endowments, outperformed others, with median returns reaching around 1.4% to 1.6% for pension plans and over 3% for foundations in Q2 2025.
Central banks, including the Bank of Canada and the U.S. Federal Reserve, held interest rates steady during the quarter, focusing on inflation and employment rather than direct reactions to geopolitical tensions.
Northern Trust Corporation, a global provider of wealth management, asset servicing, asset management, and banking services, offers its services to corporations, institutions, affluent families, and individuals. For more information about Northern Trust Corporation, visit their website at www.northerntrust.com, follow them on Instagram @northerntrustcompany and LinkedIn, or contact their media representatives. In the US and Canada, media inquiries can be directed to John O'Connell at 1 312 444 2388 or John_O'[email protected]. For Europe, Middle East, Africa & Asia-Pacific, Camilla Greene can be reached at 44 (0) 20 7982 2176 or [email protected], and Simon Ansell can be reached at 44 (0) 20 7982 1016 or [email protected]. Northern Trust Corporation is headquartered in Chicago, Illinois, USA, and has a global presence with offices in 24 U.S. states, Washington, D.C., and across 22 locations in Canada, Europe, the Middle East, and the Asia-Pacific region. As of June 30, 2025, Northern Trust Corporation had assets under custody/administration of US$18.1 trillion and assets under management of US$1.7 trillion.
[1] Northern Trust Corporation. (2025). Canadian Pension Plans Show Modest Gains Amid Trade Uncertainty. Retrieved from Business Wire
[2] Investment Executive. (2025). Canadian Pension Plans Post Strong Returns in Q2. Retrieved from Investment Executive
[3] The Globe and Mail. (2025). Canadian Pension Plans Post Modest Gains in Q2. Retrieved from The Globe and Mail
[4] Financial Post. (2025). Canadian Pension Plans Show Resilience in Q2. Retrieved from Financial Post
[5] Canadian Pension & Benefits. (2025). Canadian Pension Plans Deliver Modest Returns in Q2. Retrieved from Canadian Pension & Benefits
- The news about Canadian pension plans shows that they managed to achieve modest positive returns in Q2 2025 despite ongoing trade uncertainties, with performance primarily driven by the equity markets.
- The strong returns from equity investments, including the S&P/TSX Composite Index and the MSCI EAFE Index, were key factors in the overall performance of Canadian pension plans.
- Despite the challenges in the fixed income market due to rising yields, and the volatility caused by trade uncertainties, businesses such as foundations and endowments with a strong equity allocation outperformed other pension plans.
