TORONTO, ONTARIO — (Marketwired) — 08/09/13 — The CPP Fund ended the first quarter of its 2014 fiscal year on June 30, 2013 with net assets of $188.9 billion, compared to $183.3 billion at the end of the previous quarter. The $5.6 billion increase in assets for the quarter consisted of $1.9 billion in net investment income after operating costs and $3.7 billion in net CPP contributions. The portfolio delivered a gross investment return of 1.1% for the quarter.
“Overall we would characterize the quarter as relatively turbulent compared to recent reporting periods. Interest rates rose significantly as bond markets fell, while volatility increased across major equity markets producing mixed returns,” said Mark Wiseman, President & Chief Executive Officer, CPP Investment Board (CPPIB). “A balanced portfolio, diverse assets, global reach, and exposure to privately-held investments contributed to our results. Importantly, we remain disciplined and focused on the long term, while continuing to invest in the people and processes required to create enduring value for current and future beneficiaries of the CPP.”
Investment highlights during the fiscal first quarter include:
Private Investments
Real Estate Investments
Investment highlights following the quarter end include:
Public Market 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 6.9%, or 5.0% 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
Five and 10-Year Returns(1)
(for the period ending June 30, 2013)
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 June 30, 2013, the CPP Fund totalled $188.9 billion. For more information about CPPIB, please visit .
Contacts:
Linda Sims
Director, Media Relations
(416) 868-8695