Canadian Equity drives Q2 pension gains amid market volatility

Canadian pension plans delivered a median return of 1.41 percent in the second quarter of 2025, lifted primarily by Canadian Equity, which posted the highest asset-class return at 8.33 percent.  

The broader market backdrop remained volatile, but plans with strong equity positioning saw relative outperformance across public and private sectors. 

According to BNY Global Risk Solutions, the one-year median return as of June 30, 2025, was 9.73 percent, while the median 10-year annualised return stood at 6.58 percent.  

The data is drawn from the BNY Canadian Asset Strategy View universe, comprising 70 Canadian corporate, public, and university pension plans along with foundations and endowments.  

The universe represents $337bn in investment assets, with an average plan size of $4.82bn.  

Peer comparisons by plan type and size are supported by BNY’s sub-asset class universe breakdowns. 

Foundations and Endowments outperformed other plan types with a 3.47 percent median return for the quarter, exceeding returns from both Public and Corporate Pension Plans.  

Plans with over $1bn in assets also outperformed the median of the broader BNY Canadian Asset Strategy View universe. 

David Cohen, director of Global Risk Solutions at BNY, said that “geopolitical and economic developments were significant throughout Q2.”  

He noted that the US Liberation Day tariff announcement sparked initial market volatility, which eased following a 90-day reciprocal tariff pause.  

Cohen also cited NATO’s increased defence spending, tensions with Iran, and the US passage of the “One Big Beautiful Bill” as contributing to a turbulent investment environment.  

Still, he said, “Canadian pension plans continued to deliver positive performance,” with equity strength offsetting negative results from Canadian bonds and private assets. 

All major equity segments reported positive returns for the quarter. Canadian Equity delivered a median return of 8.33 percent, just behind the S&P/TSX Composite Index return of 8.53 percent.  

International Equity returned 6.31 percent, slightly outperforming the MSCI EAFE Index at 6.25 percent.  

Emerging Markets Equity posted a median return of 7.64 percent, beating the MSCI Emerging Markets Index return of 6.37 percent.  

Global Equity reported a median return of 5.12 percent, below the MSCI World Index at 5.83 percent. US Equity returned 4.26 percent, also underperforming the S&P 500 Index return of 5.18 percent. 

Among traditional asset classes, Canadian Fixed Income had the lowest median return at -1.06 percent, lagging the FTSE Canada Universe Bond Index, which returned -0.57 percent. 

Non-traditional asset classes saw negative performance across the board.  

Private Equity posted the weakest return at -2.36 percent.  

Hedge Funds and Real Estate followed with median returns of -2.02 percent and -1.25 percent, respectively. 

Median Returns – BNY Canadian Asset Strategy View Universe 

(All returns are gross of fees and calculated in Canadian dollars.) 

CIBC Mellon, the investment servicing provider behind the report, is jointly owned by BNY and Canadian Imperial Bank of Commerce.