CPP Fund posts 11.6% re­turn

The Guardian (Charlottetown) - - BUSINESS - BY DAVID PADDON

Canada Pen­sion Plan In­vest­ment Board achieved an 11.6 per cent rate of re­turn in fis­cal 2018, keep­ing it on track to pro­vide long-term fi­nan­cial sup­port for the coun­try’s largest re­tire­ment fund, ac­cord­ing to fig­ures re­leased Thurs­day.

The CPP Fund in­creased its as­sets by $39.4 bil­lion over the fi­nan­cial year ended March 31, slightly more than the $37.8 bil­lion in­crease in fis­cal 2017 and much bet­ter than the $14.3 bil­lion in­crease in 2016.

At the end of March, the CPP Fund had net as­sets of $356.1 bil­lion, up from $316.7 bil­lion at the end of fis­cal 2017 and $278.9 bil­lion at the end of fis­cal 2016, which in­cluded nine months in cal­en­dar 2015.

In­vest­ment gains have off­set shrink­ing em­ployer and em­ployee con­tri­bu­tions, which fell to $2.7 bil­lion in fis­cal 2018 from $4.3 bil­lion in fis­cal 2017 and $5.2 bil­lion in fis­cal 2016.

Canada’s chief ac­tu­ary es­ti­mates the CPP Fund can meet its obli­ga­tions with an av­er­age re­turn of 3.9 per cent over 75 years.

The in­vest­ment port­fo­lio’s 10year real rate of re­turn, which is com­pa­ra­ble to the chief ac­tu­ary’s bench­mark es­ti­mate, was 6.2 per cent in fis­cal 2018 while the five-year rate of re­turn was 10.4 per cent.

CPPIB chief ex­ec­u­tive of­fi­cer Mark Machin de­clined to pre­dict Thurs­day how in­vest­ment re­turns will turn out this year.

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