Equities and fixed income markets contributed to performance, according to RBC Investor Services
Canadian defined-benefit (DB) pension plans posted their best performance of the year in Q3 2025, buoyed by strong showings in both equity and fixed income markets.
According to RBC Investor Services (RBCIS), plans under its administration delivered a median return of 4.4 per cent for the quarter, pushing year-to-date (YTD) performance to 7.1 per cent.
“The third quarter of 2025 was unusual in that both equities and fixed income advanced at the same time,” said Isabelle Tremblay, director, client solutions and asset owner segment lead at RBCIS. “We can attribute the equity returns to resilient corporate earnings, AI-driven productivity and strong deal-making. Gains were especially strong among gold producers, as investors continued to look for stability and diversification through traditional safe-haven assets.”
Canadian equities led the way with a 9.5 per cent gain for the quarter and a 21.5 per cent return YTD. The S&P/TSX Composite Index surged 12.5 per cent during the quarter, translating to a 23.9 per cent gain so far this year.
Meanwhile, materials stocks outperformed, soaring 37.8 per cent in Q3 and 79.3 per cent YTD, powered by strength in gold producers such as Agnico Eagle and Barrick. Other sectors contributing to the rally included Information Technology (13.2 per cent), Energy (12.6 per cent), and Financials (10.6 per cent).
South of the border, U.S. equities - measured by the S&P 500 Index in Canadian dollar terms -returned 10.3 per cent in Q3 and 11.1 per cent YTD. The depreciation of the Canadian dollar provided an additional tailwind.
Standout sectors also included Information Technology and Communication Services, rising 15.4 per cent and 14.2 per cent, respectively. Performance was largely driven by strong earnings from the “Magnificent 7” tech giants, with Consumer Discretionary stocks also delivering an 11.7 per cent gain for the quarter.
Global equities continued to trend upward, with client plans gaining 8.7 per cent in Q3 and 14.5 per cent YTD. The MSCI World Index (CAD) posted a 9.4 per cent return for the quarter and 13.6 per cent YTD.
Fixed income also contributed to the strong quarter as client bond holdings gained 1.5 per cent in Q3 and 2.1 per cent YTD. The FTSE Canada Overall Bond Index mirrored this performance, rising 1.5 per cent for the quarter and 3.0 per cent YTD, with medium-term bonds leading returns.
“The Bank of Canada's decision to reduce its key interest rate by 0.25 per cent on Sept. 17 encouraged fixed income investors, with lower yields supporting broader portfolio outcomes,” Tremblay added.
