Canadian pension funds averaged a return of 6.8 per cent last year, up from 5.4 per cent in 2015, as they benefited from a mix of investments across sectors and asset classes, according to research by RBC Investor & Treasury Services.
The country's biggest funds, such as the Canada Pension Plan Investment Board, have grown dramatically in recent years by directly investing in assets such as real estate and infrastructure, as well as equities and bonds.
Experts say that has helped Canadian pension funds achieve positive returns despite market volatility in the wake of Britain's decision to leave the European Union and Donald Trump's unexpected win in the U.S. presidential election.
"Maintaining a diversified portfolio across sectors and asset classes and keeping a close eye on global developments were important considerations over a year which came with remarkable change," said RBC Investor & Treasury Services executive James Rausch.
Continued uncertainty, including the potential for interest rate hikes, may affect returns in 2017, RBC said. It said markets would need to adjust to the new U.S. administration and cited developments in Europe following the "Brexit" vote and uncertainty surrounding the Chinese economy as additional headwinds.