Global markets experienced a volatile and negative month in March 2026, driven by a sharp escalation in geopolitical tensions in the Middle East. The resulting surge in energy prices weighed on risk assets and contributed to a broad repricing of inflation expectations.

Equity markets declined across most regions. The S&P/TSX Composite returned -4.3% for the month, with strength in energy insufficient to offset broader weakness. The S&P 500 returned -2.8%, as higher energy prices and increased uncertainty pressured growth expectations. International developed equities underperformed, with the MSCI EAFE returning -8.2%, reflecting significant declines in European markets. Emerging markets were hit hardest, with the MSCI Emerging Markets Index returning -11.1% amid deteriorating risk sentiment and capital outflows.

Fixed income markets were also negative and notably did not provide their typical diversification benefits. The FTSE Canada Universe Bond Index returned -2.0%, while the Bloomberg Global Aggregate Bond Index returned -0.9%. Bonds moved broadly in tandem with equities during the month, as rising inflation expectations and energy-driven uncertainty pushed yields higher before a modest late-month flight to quality.

Commodities were the key driver of market dynamics. Oil prices surged materially, with Brent crude rising sharply and WTI moving above US$100 per barrel, reflecting supply concerns tied to the Middle East conflict. This marked one of the largest monthly increases in oil in recent years and provided a partial offset for Canadian equities. In contrast, gold declined by -11.3%, failing to act as a safe haven during the period.

From a currency perspective, the Canadian dollar depreciated approximately 2.3% against the U.S. dollar over the month. This provided a modest tailwind to unhedged global exposures for Canadian investors, partially offsetting local currency losses.

Against this backdrop, the Balanced Fund returned -3.5% for the month, demonstrating resilience relative to broader equity markets. The Equity Fund returned -6.4%, while the Bond Fund returned -1.5%, as rising yields weighed on fixed income markets. The Money Market Fund returned 0.2%.

Overall, March was characterized by a rapid repricing of geopolitical risk, higher energy prices, and a broad risk-off environment, with both equities and bonds declining simultaneously.

Disclaimer

The information contained in this market summary is provided for general informational purposes only and is intended to help CSS Pension Plan members understand recent market conditions and the performance of CSS funds. It does not constitute investment advice, and should not be relied upon as the basis for any investment decision.

As a defined contribution plan member, the value of your account and the appropriateness of any particular investment option will depend on your individual financial situation, retirement goals, time horizon, and risk tolerance. Past fund performance is not indicative of future results.

Nothing in this summary should be construed as a recommendation to buy, sell, or hold any investment, or to change your current contribution or investment directions.

If you have questions about your personal account or would like to discuss your individual circumstances, we encourage you to contact a CSS Retirement and Pension Advisor. Our advisors are available to provide guidance tailored to your specific situation.