Canadian Pensions Reap Benefits of Global Diversification Amid Modest Private Market Performance

Canadian defined benefit pension plan sponsors are reaping the benefits of global diversification strategies during Q2 2026, despite private markets performing more modestly. According to Grant Johnsey, head of market solutions for the Americas at Northern Trust, Canadian pensions might consider shifting some money back to public markets if this trend continues.

The median Canadian DB pension plan reported a 6.6 per cent return during the second quarter of 2026, thanks in part to a rebound from public equities, particularly global ones. While Canadian equities delivered a seven per cent return for pension investors, they were outperformed by U.S. equities (17.1 per cent), international developed markets (12.9 per cent), and emerging markets (26.2 per cent). A weak Canadian dollar also contributed to foreign investment returns during Q2.

A report by CIBC Mellon found that Canadian public pension plans produced a 6.89 per cent return for the quarter, while Canadian corporate pension plans recorded a 6.06 per cent return. Meanwhile, private equity produced a median return of three per cent. The report also noted a decrease in yields across the Canadian bond market, with Government of Canada bond yields dropping by roughly 10 basis points across the curve.