CPPIB reports Q2 return of 1.9%; CPP Fund net assets grow to $170.1B

TORONTO – The CPP Investment Board says its investment portfolio produced a return of 1.9 per cent in the second quarter.

The board, which invests funds on behalf of the Canada Pension Plan, reported Friday that the CPP Fund had net assets of $170.1 billion as of Sept. 30, up from $165.8 billion at the end of the previous quarter.

The $4.3-billion increase in net assets after operating expenses resulted from $3.1 billion in investment income and $1.3 billion in net CPP contributions.

“The positive returns this quarter reflected gains across most global equity markets as well as income generated by our active investment strategies,” said CPPIB president and CEO Mark Wiseman.

“The strong pace of investment activities during the past six months continues to demonstrate our ability to leverage our exceptionally long investment horizon and internal capabilities to complete sizable and complex investments while maintaining a disciplined, patient approach.”

Meanwhile, the CPPIB noted in reporting the quarterly results that the latest triennial review released this month by the chief actuary of Canada reaffirmed that the CPP remains sustainable at the current contribution rate of 9.9 per cent throughout the 75-year period of the report.

The chief actuary’s projections are based on the assumption that the fund will attain an annualized four per cent real rate of return. The 10-year annualized nominal rate of return of the fund is 6.7 per cent, the board said.

The chief actuary’s report also indicates that CPP contributions are expected to exceed annual benefits paid until 2021, providing a nine-year period before a portion of the investment income from the CPPIB will be needed to help pay pensions.

The CPP Investment Board is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries.

It’s diversified portfolio includes public and private equities, real estate, infrastructure and fixed income instruments.