Photo: The Canadian Press
The Canada Pension Plan Investment Board earned a net return of 1.3 per cent in its most recent fiscal year as inflation and rising interest rates weighed on both stock and fixed-income markets.
The board says the investment gains combined with net transfers from the Canada Pension Plan brought its net assets to $570 billion on March 31, up from $539 billion a year earlier.
CPP Investments says the increase included $8 billion in net income and $23 billion in net transfers from the Canada Pension Plan.
It says the gain for its latest fiscal year reflected returns on investments in infrastructure and certain US dollar-denominated private equity and credit assets, which benefited from foreign exchange, while external investment managers using quantitative, equity, and fixed-income trading strategies also contributed positively to results.
CPP Investments says its performance was partially offset by declines in both equities and fixed income across major markets as high inflation and rising interest rates weighed heavily on both asset classes.
A weaker loonie against the US dollar and other major currencies helped boost investment returns.
“Despite significant declines in global equity and fixed income markets during our fiscal year, our investment portfolio remained resilient, delivering stable returns while outperforming major indexes,” CPP Investments chief executive John Graham said in a statement.
On a relative basis, the fund’s net return of 1.3 per cent for the year beats the 0.1 per cent return by its aggregated reference portfolios over the same period.
The fund’s 10-year annualized net return stood at 10.0 per cent.
As of March 31, CPP Investments portfolio included 33 per cent in private equities, 24 per cent in public equities, 12 per cent in fixed come, 13 per cent in credit investments, nine per cent in real estate and nine per cent in infrastructure.
