CORRECTED-Canada pension funds achieve 5.4 pct annual return in 2015 - RBC

Thu Feb 18, 2016 1:09pm EST
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(Corrects title of David Heisz in fourth paragraph)

* 3.1 percent return in fourth quarter - RBC

* Diversification helps offset weak domestic sectors

TORONTO, Feb 18 (Reuters) - Canadian pension funds achieved a return of 5.4 percent on their investments in 2015 as their strategy of diversifying internationally helped mitigate volatile market conditions, research by RBC Investor & Treasury Services showed.

The research, which is the industry's most comprehensive study of Canadian funds, showed they achieved a return of 3.1 percent in the fourth quarter of 2015, following back-to-back losses in the second and third quarters.

The funds have pursued a strategy of directly investing in assets globally, including investments in infrastructure and real estate. Pension experts say that has provided them with a buffer against market volatility and challenging economic conditions.

"Canadian pension plans clearly benefited from global diversification portfolio strategies," David Heisz, chief executive officer of RBC Investor Services Trust, said in a statement on Thursday.

Heisz said the positive 2015 performance could largely be attributed to a lift from global equities, offsetting downward pressure from weaker domestic sectors, particularly commodities, resources and energy over the course of the year.

Canada's biggest 10 public pension funds now manage assets worth more than C$1.1 trillion, having tripled in size since 2003, a study by the Boston Consulting Group showed in December. (Reporting by Matt Scuffham; Editing by Jonathan Oatis)