The Canada Pension Plan Investment Board’s annual rate of return dropped to 3.4% for the 2016 fiscal year, the lowest since the Great Recession, the CPPIB said Thursday in its annual report.
However the Toronto-based fund manager, which shepherds investments on behalf of the Canada Pension Plan, says its 10-year inflation-adjusted rate of return was 5.1% — above the Chief Actuary of Canada’s benchmark of 4.0%.
In addition, CPPIB notes that its assets increased over the 12 months ended March 31 by $14.3 billion to $278.9 billion.
By comparison, its 2015 rate of return was 18.3% and the 2014 rate of return was 16.1% — the fund’s best two years since it suffered a 18.8% decline in asset value in the 2009 fiscal year amid a global market meltdown.
“Over the past 12 months, despite one of the more challenging investment environments in recent years and predominately negative equity markets, the CPP Fund generated a moderate gain,” Mark Wiseman, the CPPIB’s out going president and chief executive, said in a statement.
Wiseman has been instrumental in leading CPPIB as it pursued an “active” investment strategy into a variety of assets including real estate, public and private stocks and infrastructure assets around the world.
“In the first 10 years of our active management strategy, we have generated significant value for CPP contributors and beneficiaries, which would not have been earned through a passive portfolio.”
The fund says investments, after costs, have added $125.6 billion cumulatively in the past 10 years, including fiscal 2016. It says 57% of its total assets are from investment income since the fund was created in 1999.
Earlier Thursday, the Canada Pension Plan Investment Board announced that Wiseman is leaving to take a senior role at U.S.-based investment firm BlackRock Inc., which has a total of about US$4.7 trillion in assets under management, including a range of products that includes mutual funds and the iShares exchange-traded funds business.
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