Personal Investor: Setting the record straight on CPP
The Canada Pension Plan Investment Board (CPPIB), Canada's biggest public pension plan, said it achieved a return of 0.7 per cent on its investments in the latest quarter, with the strength of the Canadian dollar hurting its performance.
The CPPIB, which manages Canada's national pension fund and invests on behalf of 20 million Canadians, said it ended the quarter to Sept. 30 with net assets of $328.2 billion, compared with $326.5 billion at the end of the previous quarter.
"Equities advanced internationally during the quarter moderated by negative Canadian fixed income and foreign currency returns," the CPPIB's Chief Executive Mark Machin said in a statement on Friday.
The fund has diversified internationally, becoming one of the world's biggest investors in infrastructure and real estate. It is also a major global investor in equities and bonds, and derives the majority of its earnings from overseas.
The strength of the Canadian dollar, which hit its highest level for over two years, means that overseas earnings are not worth as much when they are converted back to the fund's domestic currency.
The fund does not hedge against currency movements, saying that while they may impact its results in the short-term, it does not expect them to have a significant impact on its long-term performance.