February 14 -16:00 ET) – The Canada Pension Plan Investment Board had $1.7 billion in invested assets at December 31, 1999 compared with $818 million at September 30, 1999. It received $663 million in new cash from the Canada Pension Plan in the third quarter of fiscal 2000. These funds were invested as soon as they were received, says the board.
The CPP has total assets of approximately $37.6 billion. In addition to the $1.7 billion under management at the CPP Investment Board, $30.3 billion is invested in provincial and federal government bonds with the remainder held in a short-term operating reserve. Both the bond portfolio and the operating reserve are administered by the Federal Government.
In determining the asset mix, the board has taken into consideration the amounts that are already invested in government bonds. As a result, says the board, 100% of new investments by the CPP Investment Board are allocated to equities.
Approximately 80 percent of the Canada Pension Plan assets under our management are invested in the shares of major Canadian companies and the remainder in foreign equities. The Canadian investments substantially replicate the Toronto Stock Exchange 300 Composite Index. The foreign investments substantially replicate the Standard and Poor’s 500 Index of leading U.S. companies and the EAFE (Europe, Australasia and Far East) Index of about 1,000 overseas companies. These indexes are a cost-efficient way to invest in domestic and foreign markets and to diversify investment risk among different global economies.
During the month of December 1999 the federal and provincial finance ministers unanimously agreed to permit the CPP Investment Board to invest actively up to 50% of the assets committed to Canadian equities.
-IE Staff