Canada Pension Plan Investment Board Announced on Wednesday The company achieved an 8% return in fiscal 2024 (period ending March 31).
Funds’ net assets rose to C$632.3 billion ($462.66 billion) from C$570 billion a year earlier.
Strong performance in public equities, infrastructure, energy and credit boosted the fund’s returns, while weakness in emerging markets and real estate had a negative impact on returns.
“CPP fund growth this year continued its trend of reaching highs several years earlier than originally anticipated by actuarial projections,” President and CEO John Graham said in a statement. “The solid performance of all our investment divisions and key corporate divisions helps demonstrate how our strategy is on track.”
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The CPPIB, which manages the assets of the Canada Pension Plan, has 22 million contributors and beneficiaries, more than half of Canada’s population. The fund’s annualized returns over the past five and 10 years have been 7.7% and 9.2%, respectively.
Returns by asset class and region
CPP Investments’ portfolio has an allocation of 28% to public equities and 31% to private equities. Government bonds account for 12% of the portfolio, while credit, real estate, and infrastructure account for 13%, 8%, and 8%, respectively.
Public equity returned 13.8% in 2024, while private equity returned 10.4%. Credit and infrastructure returns were 10.8% and 2.6%, respectively. The only asset classes with negative returns were government bonds, which returned -0.4%, and real estate, which returned -5%.
The fund reduced its holdings in infrastructure and real estate by 1 percentage point each in FY2024, increased its allocation to public equities by 4 percentage points, and reduced its allocation to private equity by 2 percentage points compared to FY2023.
From fiscal 2023 to fiscal 2024, the fund increased its U.S. investments from 36% to 42% of its portfolio. CPPIB also reduced its portfolio’s allocation to Canadian investments from 14% to 12%. Exposure to Europe increased by 1% and exposure to Asia Pacific decreased from 26% to 21%.
Investments across all regions generated positive returns in FY24. Investments in the United States generated a return of 9.4%. For CPP investments, 24th Annual Report Of the fund’s 7.7% annual return over five years, 59% came from investments in the United States.
The return on investments in the Asia-Pacific region was 0.1%, which CPPIB attributed to currency losses and weaker performance from Chinese investments. The fund also returned 5.9% in fiscal 2024 from its investments in Canada, primarily government bonds and infrastructure investments.
The Latin America region returned 11.5%, driven primarily by Brazilian stocks. CPPIB’s European investments returned 5.8%, with positive returns in public and private equity, but lower returns from utilities and infrastructure due to the Ukraine war.
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Tags: Canada, Canada Pension Plan Investment Board, CPP Investments, CPPIB, John Graham
