Canada’s Largest Pension Fund Hits $326.5 Billion at Q1 Fiscal 2018

Significant uplift” from global equity markets, strengthening Canadian dollar.

In addition to the strengthening Canadian dollar, Canada’s largest pension plan received a “significant uplift” from global equity markets during the first quarter of fiscal 2018, ended June 30, 2017, returning 1.9% gross (1.8% net of all costs).

This increased the net assets to $326.5 billion CAD (roughly $257 billion USD), up $9.8 billion from the end of fiscal 2017. According to the Canadian Pension Plan Investment Board (CPPIB), this came from $5.7 billion in net income after all CPPIB costs and $4.1 billion in net contributions to the fund.

The portfolio achieved five- and 10-year nominal returns of 12.1% ($134.6 billion) and 6.9% ($151.1 billion), respectively.

Global public equities returned 29.8% at $97.3 billion for the quarter while private equities returned 16.1% at $52.7 billion. Although less impressive, domestic equities were also positive, returning 3.1% ($10.1 billion) and 0.4% ($1.2 billion) in the public and private sectors, respectively.

Government bonds returned a total of 26.7% ($87.4 billion), with the majority coming from marketable bonds at 19.3% ($63.1 billion). Canadian provincial non-marketable bonds returned 7.4% ($24.3 billion).

Credit investments returned 5.7% for the quarter at $18.6 billion.

Real assets yielded 22.4% ($73.1 billion)—the largest chunk from real estate at 12.6% ($40.9 billion). The remainder came from infrastructure, natural resources, and agricultural investments at 7.3% ($23.9 billion) and 2.5% ($8.3 billion).

The only negative returns were external debt issuance and cash and absolute return strategies, resulting in 6.7% ($21.9 billion) and 5.3% ($17.4 billion) losses.

“Our strategy has delivered strong and stable returns over the five- and 10-year periods. We continue to position the Fund for future growth while seeking stability through diversification,” Mark Machin, CPPIB’s president and CEO, said in a statement. “Each major CPPIB investment program contributed to first quarter results. Global equity markets produced a significant uplift and gains from fixed income improved. Meanwhile, the strengthening Canadian dollar against most major currencies applied downward pressure, a trend that accelerated in the first half of the current quarter.”

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