The Ontario Teachers Pension Plan (OTPP) said Monday it avoided $900 million in losses in its stock portfolio last year by trimming its exposure to equity markets early in 2002.

For the year 2002, the OTPP said said its one-year rate of return was negative 2%. The pension plan racked up a $1.4 billion investment loss due to negative stock markets worldwide.

But the OTPP said that loss was 2.8 percentage points better than the 4.8 decline suffered by the composite benchmark, which tracks the main indices for Canadian and foreign markets in proportion to their weighting in the fund.

At the end of 2002, net assets were $66.2 billion, down from $69.5 billion in 2001.

Overall, the pension plan said equity investments returned negative 14.1%.

Plan administrators say they shifted billions to private equity and alternative investments when the stock market looked shaky. “Anticipating negative stock markets, we took action early in the year to reduce the plan’s exposure to stocks by 10%, cushioning the plan from $900 million in additional losses,” said Claude Lamoureux, president and CEO.

“Inflation-sensitive and fixed-income investments, representing over half the fund, performed very well for us this year at 13.2% and 8.6% respectively,” Lamoureux said.

At year-end, only 49% of the plan’s assets were invested in equities, compared to 60% at the end of 2001. Inflation-sensitive investments, 30% of assets, included real return bonds, commodities and real estate. Twenty-one per cent of the plan’s assets were in fixed-income securities, largely federal and Ontario government bonds, alternative investments and relative value strategies.