The Canada Pension Plan Investment Board (CPPIB) earned 6.8% on its investments this past fiscal year but lost 2.9% in the last quarter amidst global pressure on public equities and stock market selloffs, particularly those impacting China.
Refresher: Every working Canadian contributes 5.7% of their income towards the Canada Pension Plan, which serves to replace part of your income when you retire. CPPIB manages Canada’s largest pension fund, with fingers dipped into almost every type of holding, from private debt and apartment buildings to mattress companies and golf courses.
What happened: Significant investments in China (given the country’s recent regulatory reforms and COVID lockdowns) shook the CPPIB’s annual returns, including billion-dollar stakes in companies like Alibaba and Tencent and investments in state-owned banks.
- The ongoing tech selloff also impacted the CPPIB’s investments (the fund recently placed big bets on India’s emerging tech sector), as well as the fastest decline in bond prices in 40 years due to sky-high inflation and interest rate hikes.
Why it matters: Since many of us contribute our earnings to CPPIB, what the fund invests in and its performance is our business. But despite recent financial pressures that have impacted the market at large, the fund boasts a 10.8% 10-year annualized rate of return with net assets standing at a robust $539 billion—so yeah, they know what they’re doing.