CPPIB gets ‘significant uplift’ from global equity markets in latest quarter

TORONTO — The head of the country’s biggest public pension fund says it benefited from “a significant uplift” from global stock markets during its most recent quarter and will be looking for buying opportunities if a recent retreat results in better pricing.

Mark Machin, chief executive of the Canada Pension Plan Investment Board, said the CPP Fund achieved “solid” returns during the first quarter of its 2017-18 financial year.

The fund earned 1.8 per cent, net of all costs, for the three-month period.

But investors can’t assume markets will always go up and the CPPIB’s strategy is to have a diverse portfolio that will hold its value over the long term. Short-term declines are seen as buying opportunities, Machin said in an interview Friday.

“We will look for things that dislocate below what we think are their fundamental valuations,” he said.

Global stock markets have been rattled in recent days as the tensions between United States and North Korea have risen.

As for the prospect of a bigger sort of downturn, Machin said the plan does regular risk assessments, but it mostly relies on spreading out its investments to a variety of asset classes and geographic markets.

“You can’t, obviously, protect against a really broad market downturn completely, but you can cushion that by diversification across markets that are going to be less impacted in a shock situation.”

The CPP Fund’s publicly traded equities were worth $126.9 billion at June 30, or 38.9 per cent of the total holdings.

It also invests in private equity, government bonds, credit investments, real estate, infrastructure and other assets. But CPPIB doesn’t invest directly in gold — often seen as a protection against political or economic upheaval.

“We do invest in commodities, but we do not have any direct exposure in gold as a specific commodity,” Machin said.

Neither does CPPIB engage in currency hedging.

The Toronto-based fund manager ended the quarter with $326.5 billion in net assets, up $9.8 billion from March 31 when CPPIB’s 2017 financial year ended.

The CPPIB says its 10-year rate of return after accounting for expenses and inflation was 5.2 per cent.

The Chief Actuary of Canada estimates the fund can be sustainable for 75 years with an average rate of return of 3.9 per cent.

Just Posted

Canada’s 150 year ends on ice, but no hockey pucks, triple jumps allowed

OTTAWA — No figure skating. No hockey. No racing. No cell phones.… Continue reading

Banner signing at Collicutt Centre

International Day of Persons with Disabilities

Regulator investigating Sears Canada liquidation sale prices: monitor

TORONTO — The Competition Bureau is investigating allegations that prices on some… Continue reading

Liberals push cities to rethink planning with launch of ‘challenge’ program

OTTAWA — Cities looking for extra federal cash are being pushed to… Continue reading

Video: Joshua Frank explains shooting Gordon, Sandra and Monica Klaus

Frank and Jason Klaus are facing triple murder charges in the deaths Klaus’ parents and sister

Updated: Missing Sylvan Lake women found

Two young women who were last seen in Sylvan Lake have been… Continue reading

Liberals propose billions for affordable housing, including individual benefits

A Liberal government fond of promising help for those working hard to… Continue reading

Alberta Party sees growth in Central Alberta

Greg Clark addressed health care needs addressed in Red Deer

Ponoka council freezes Ponoka Fire Department spending

All discretionary spending frozen until full budget numbers are presented

WATCH: Ponoka’s Festival of Trees sees continued support

Three days of celebration and fundraising held at the Calnash Ag Event Centre

Creationist will speak at home-schooling convention in Red Deer

Ken Ham has debated Bill Nye on the Earth’s origins

Update: Innisfail girl found

A 15-year-old missing Innisfail girl has been located safe and sound. Police… Continue reading

Cost to fix Phoenix pay system to surpass $540 million, auditor general says

The federal government’s chronic salary struggles will take more time and more… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month