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Quebec pension fund sees weighted average 3.5% return in 1st half

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Caisse de Depot et Placement du Quebec, Montreal, had a weighted average return of 3.5% for the six months ended June 30, according to a Caisse news release.

Net assets increased 4.2%, or C$6.8 billion (US$6.9 billion), to C$165.7 billion – C$5.4 billion in net investment returns and C$1.4 billion in net contributions.

The 3.5% return was below the benchmark of 3.7%. However, Caisse returned an average annualized 10.5% for the three years ended June 30, outpacing the benchmark of 8.9%.

Equity was the best-performing asset class for the first six months of the year, returning 4.6%, followed by inflation-sensitive investments, 2.6%, and fixed income, 2%. The remaining assets are in other investments, including hedge funds, overlays and cash.

Caisse has an asset allocation of 37% each public equity and fixed income, 14% inflation-sensitive, 10% private equity and 2% other.

The retirement system has about C$44 billion in portfolio liquidity, according to the release.

Canada Pension Plan Investment Board, Toronto, overtook Caisse as the largest pension fund in Canada based on June 30 numbers. The CPP Investment Board last week reported total assets of C$165.8 billion as of that date.