CPP Investments portfolio grows 5 per cent in Q2 with widespread positive returns

TORONTO — CPP Investments says its portfolio of retirement funds performed well during the summer months, adding $22.3 billion or five per cent in net assets since the previous quarter.

The independent investment manager for the Canada Pension Plan says it had $456.7 billion in assets as of Sept. 30, up from $434.4 billion at the end of June.

Most of the growth came from $21.6 billion in net income from investments, after all CPP Investments costs. In addition, there was $700 million in net contributions from the Canada Pension Plan..

CPP Investments attributed the fund’s growth to a continued recovery of public equity markets in July and August, which affected both its publicly traded and private equity holdings. Those gains were partly offset by a retreat of public markets in September amid concerns about further COVID-19 lockdowns.

On a longer-term basis, after adjusting for inflation, the second quarter of fiscal 2021 had an 10-year annualized net real return of 8.8 per cent and a five-year annualized net real return of 8.0 per cent.

Canada’s chief actuary has estimated the funds require an average real rate of return of 3.38 per cent over 75 years.

Chief executive Mark Machin says all of the Toronto-based fund manager’s investment departments generated positive returns during the quarter but the organization remains cautious given the uncertain economic fallout of COVID-19.

“Our investment professionals continue to pursue opportunities that will bring value to the Fund over the long term,” Machin said in a statement.

This report by The Canadian Press was first published Nov. 16, 2020.

The Canadian Press