CPP Fund Totals $282.6 Billion at Third Quarter Fiscal 2016
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 02/10/16 -- All figures in Canadian dollars unless otherwise noted.
The CPP Fund ended its third quarter of fiscal 2016 on December 31, 2015, with net assets of $282.6 billion, compared to $272.9 billion at the end of the previous quarter. The $9.7 billion increase in assets for the quarter consisted of $12.3 billion in net investment income after all CPPIB costs, less $2.6 billion in CPP cash outflows. The CPP Fund routinely receives more CPP contributions than required to pay benefits during the first part of the calendar year, partially offset by payments exceeding contributions in the final months. The portfolio delivered a gross investment return of 4.6% for the quarter, or 4.5% net of all costs.
For the nine month fiscal year-to-date period, the CPP Fund increased by $18.0 billion from $264.6 billion at March 31, 2015. This included $16.3 billion in net investment income after all CPPIB costs and $1.7 billion in net CPP contributions. The portfolio delivered a gross investment return of 6.3% for this period, or 6.1% net of all costs.
"Income generated across our investment programs and the advance of global equities contributed to the Fund's growth during the quarter, while fixed income results were mixed. Our globally diversified portfolio allowed us to earn significant gains from foreign exchange, as the Canadian dollar depreciated against most foreign currencies," said Mark Wiseman, President & Chief Executive Officer, CPP Investment Board (CPPIB). "The design of our highly diversified portfolio continues to deliver growth during positive market conditions, while preserving value by moderating the effect of difficult markets on the downside. The five- and 10-year returns remain strong and demonstrate the prudence of our long-term investment approach."
The Canada Pension Plan's multi-generational funding and liabilities give rise to an exceptionally long investment horizon. To meet long-term investment objectives, CPPIB is building a portfolio and investing in assets designed to generate and maximize long-term, risk-adjusted returns. Accordingly, long-term investment returns are a more appropriate measure of CPPIB's performance than returns in any given quarter or single fiscal year.
Long-Term Sustainability
In the most recent triennial review released in December 2013, the Chief Actuary of Canada reaffirmed that, as at December 31, 2012, 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 prospective 4.0% real rate of return, which takes into account the impact of inflation. CPPIB's 10-year annualized net nominal rate of return of 7.5%, or 5.8% on a real rate of return basis, was comfortably above the Chief Actuary's assumption over this same period. These figures are reported net of all CPPIB costs to be consistent with the Chief Actuary's approach.
The Chief Actuary's report also indicates that CPP contributions are expected to exceed annual benefits paid until the end of 2022, after which a portion of the investment income from CPPIB will be needed to help pay pensions.
Q3 Investment Highlights:
About Canada Pension Plan 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 19 million 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 Hong Kong, London, Luxembourg, Mumbai, New York City and Sao Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At December 31, 2015, the CPP Fund totalled $282.6 billion. For more information about CPPIB, please visit or follow us on or .
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Dan Madge
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+1 416 868 8629
Mei Mavin
Director, Corporate Communications
+44 20 3205 3515
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Datum: 10.02.2016 - 14:00 Uhr
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