CANADA - The Canada Pension Plan Investment Board (CPPIB) has announced a CAN$5.3bn (US$4.3bn) decline in asset values over the first half of the fiscal year, resulting in the fund's value falling to $117.4bn.
This was mitigated somewhat by a new inflow of $4.3bn of contributions not needed to cover immediate benefit payments.
However, David Denison, president and CEO, CPPIB, underlined the long term investment outlook of the fund, noting: "The CPP fund is invested for the long term, has a broadly diversified portfolio and steady cash inflows, and is structured to withstand stock market cycles in order to help secure CPP pensions for decades and generations."
He said while the fund had been hit by the dramatic downturn in equity markets, it had incurred "virtually no losses" from credit or counter-party exposures in the same period.
The fund has generated an annualised four-year return of 6.6%, equivalent to $22bn.
Denison added: "Although the turmoil in financial markets has been unsettling for everyone, unlike many short-term investors who have had to sell assets at distressed prices, the CPPIB is very well-positioned to acquire attractive assets at advantageous prices that will generate significant long-term value for the fund."
The fund's asset allocation at the end of September was 59.9% equities, comprising 46.8% public and 13.1% private equity investments, 26.8% fixed income, including bonds, money market securities, and other debt represented.
Inflation-sensitive assets represented 13.3%, of which 6.2% was real estate, 4.0% was inflation-linked bonds and 3.1%.
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