Silent returns due to market volatility ‘not seen since the onset of the epidemic’
The Canadian Pension Plan Investment Board has crossed the half-trillion threshold in its most recent fiscal year, with assets reaching $ 539-billion as of March 31.
The net return for the year was 6.8 percent, up from last year’s $ 497-billion, with the $ 42-billion increase coming in the form of a net transfer from the $ 8-billion Canada pension plan.
The five-year return of CPP funds comes in at 10 per cent, the 10-year return at 10.8 per cent
John Graham, chief executive of the Pension Management Agency, said: “Despite the turbulent market conditions caused by Russia’s war against Ukraine, the epidemic and the disruption of the supply chain caused by rising inflation, CPP investment has returned solidly in FY 2022.”
“Our 10-year efficiency is about 11 percent, which stood at the end of the last fiscal year, showing a steady increase in long-term funding (CPP)… with steady resilience at uncertain times.”
Private equity, infrastructure, real estate and credit investments were the major contributors to the fund’s overall performance in FY2022.
The pension giant said returns in the first nine months of the year were muted by “volatility affecting public equities during the final quarter, at levels not seen since the onset of the epidemic”.
For reference, CPP Investments noted that the return on funds in the 12 months to 2021 was 13.8 percent higher than in FY 2022.
Bond prices also fell at a pace that has not been seen in more than 40 years in the fourth quarter.
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Also, the ক্ষতি 4-billion currency loss in fiscal year was due to a variety of factors, including the appreciation of the Canadian dollar against the US dollar and other major currencies, the impact of rising commodity prices and the impact of monetary and financial development. Policies throughout the global economy.
“Looking to the future, we are dealing with uncertain business and investment situations, including high inflation expectations, potentially increasing supply chain disruptions, weak global economic growth projections and the international response to the war in Europe, all in the face of a continuing global epidemic and climate change.” Graham says.
However, he said the pension management agency’s diversification strategy and market breadth, combined with its local presence and a global brand, are pushing it forward into a “position of strength.”
In an interview Thursday, Graham said the pension fund is positioned for higher-than-expected inflation weather a year ago due to its long-term strategy of investing in real estate, such as infrastructure and real estate.
“It simply came to our notice then. It has good, strong total returns and then some protection against inflation, ”he said.
“It’s growing faster than many other areas.”
Although stock market volatility created some “headwinds” towards the end of the fiscal year, Graham said CPPIB would continue to invest across geographic and all market sectors.
“We have the advantage of diversity (and) will be active in both public and private equity markets around the world,” he said.
Giving an example of the advantages of the Asia-Pacific market strategy, he said that despite the increase in recent months and some drag on geopolitical concerns, the region has become the second highest performer for CPP investment in the last five years.
“We must realize that how we invest is really important and we spend a lot of time thinking about how we invest in different countries of the world,” he said.
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