TORONTO, ONTARIO — (Marketwired) — 11/08/13 — The CPP Fund ended the second quarter of its 2014 fiscal year on September 30, 2013 with net assets of $192.8 billion, compared to $188.9 billion at the end of the previous quarter. The $3.9 billion increase in assets for the quarter consisted of $3.3 billion in net investment income after operating costs and $0.6 billion in net CPP contributions. The portfolio delivered a gross investment return of 1.8% for the quarter.
For the six month fiscal year-to-date period, the CPP Fund increased by $9.5 billion from $183.3 billion at March 31, 2013. This includes $5.1 billion in net investment income after operating costs and $4.4 billion in net CPP contributions. The portfolio delivered a gross investment return of 2.9% for this period.
“Domestic and foreign equity markets, and gains in each of our active investment programs, contributed to the increase in the CPP Fund during the quarter. Overall, investment returns were consistent with the expected performance of a balanced portfolio,” said Mark Wiseman, President & Chief Executive Officer, CPP Investment Board (CPPIB). “Our five- and 10-year nominal returns of 6.4% and 6.8% respectively, demonstrate our commitment to focusing on the long term, as we continue to take actions today for the benefit of CPP Fund contributors and beneficiaries for decades to come. We continue to diversify the portfolio and during the reporting period we made significant investments in eight different countries.”
Investment highlights during the fiscal second quarter include:
Private Investments
Public Market Investments
Real Estate Investments
Investment highlights following the quarter end include:
Private Investments
Real Estate Investments
Long-Term Sustainability
In the latest triennial review released in November 2010, the Chief Actuary of Canada reaffirmed that the CPP remains sustainable at the current contribution rate of 9.9% throughout the 75-year period of his report. The Chief Actuary-s projections are based on the assumption that the Fund will attain a 4% real rate of return, which takes into account the impact of inflation. CPPIB-s 10-year annualized nominal rate of return of 6.8%, or 4.9% on a real rate of return basis, is above the Chief Actuary-s prospective 4% real rate of return assumption.
The Chief Actuary-s report also indicates that CPP contributions are expected to exceed annual benefits paid until 2021, when a portion of the investment income from CPPIB will be needed to help pay pensions. The Chief Actuary is currently undertaking a triennial review of the CPP as at December 31, 2012, and is expected to release his report in late calendar 2013.
Asset Mix
Note: All figures in Canadian dollars unless otherwise noted.
About CPP Investment Board
Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, CPPIB is governed and managed independently of the Canada Pension Plan and at arm-s length from governments. At September 30, 2013, the CPP Fund totalled $192.8 billion. For more information about CPPIB, please visit .
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Linda Sims
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