CPPIB Loses 0.8% in Q1 Fiscal 2024

Despite the investment loss, net transfers helped raise the Canadian pension giant’s asset value to C$575 billion.

The Canada Pension Plan Investment Board reported a 0.8% investment loss for the first quarter of fiscal 2024 that ended June 30. However, the loss was offset by net transfers from the Canada Pension Plan, which increased the pension giant’s net asset value to C$575 billion ($427.54 billion) from C$570 billion at the end of the previous quarter and C$523 billion at the same time last year.

CPPIB, which includes the base CPP and additional CPP accounts, reported five- and 10-year annualized net returns of 9.8% and 7.4%, respectively.

According to the pension fund, its investment gains for the quarter were negated by rising interest rates, as well as the Canadian dollar strengthening against most major currencies, which dented gains in local terms.

“The quarter’s results reflect gains across most asset classes, which were offset by the impact of foreign exchange losses due to a stronger Canadian dollar relative to the U.S. dollar,” CPPIB President and CEO John Graham said in a release. “While we anticipate periods of uncertainty to persist, we expect our portfolio will continue to be resilient and create value for CPP contributors and beneficiaries for generations to come.”

The fund said its public equities and renewable energy investments, along with gains by external portfolio managers, contributed positively to its results during the quarter. Meanwhile, the fund’s credit and real assets were relatively flat in local dollar terms, and fixed-income assets declined in value due to rising interest rates.

The base CPP account ended the fiscal first quarter with net assets of C$547 billion, up from C$546 billion at the end of Q4 fiscal 2023, which ended March 31. The C$1 billion increase in assets was a result of C$5 billion in net transfers from the CPP, mostly offset by a net loss of C$4 billion.

The additional CPP account ended its fiscal first quarter with net assets of C$28 billion, up from C$24 billion at the end of the previous quarter. The C$4 billion increase was due to C$4 billion in net transfers from the CPP and a net loss of C$242 million. The additional CPP account’s net return was negative 0.9% for the quarter.

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