Public equities, particularly those in the IT and communications sectors, led the Canada Pension Plan Investment Board to a 7.8% return for its fiscal year, which ended March 31. The performance raised its assets to C$793.3 billion ($574.2 billion) from C$714.4 billion one year earlier.
The C$78.9 billion increase in net assets included net income of C$56.9 billion and net transfers of C$22 billion from the Canada Pension Plan. The fund’s return significantly lagged those of its benchmark portfolios, which returned 13.2%.
“Tariffs, trade disputes and geopolitical tension shape costs, supply chains and investment conditions across many sectors,” CPP Investments President and CEO John Graham noted in his annual report message. “Conflicts in Europe and the Middle East have also affected energy markets, shipping routes and inflation expectations.
In addition to IT and communications equities, the pension fund attributed the gains to a “diverse range of asset classes,” such as energy and infrastructure assets, which it said contributed “meaningfully,” along with “steady” gains in credit investments.
However, the returns were tempered by foreign exchange movements, particularly the depreciation of the U.S. dollar against major currencies, as well as by losses in government bonds following a shift in market expectations for major central bank interest policies.
CPP Investments’ asset allocation as of March 31 was 36% public equities, 22% private equities, 20% real assets, 13% government bonds and 9% credit. On a geographical basis, the portfolio’s assets were 48% invested in U.S. companies, 18% in Asia-Pacific, 17% in Europe, 12% in Canada and 5% in Latin America.
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