Ontario Teachers’ Pension Plan, Toronto, posted a 13% return on investments in 2009 on gains in fixed income and a surge in Canadian stocks.
Investment income was C$10.9 billion (US$10.8 billion), compared with a net investment loss of C$19 billion in 2008, according to a statement from the fund. The plan managed C$96.4 billion as of Dec. 31.
Results were less than the average 16% return for Canadian pension funds, as estimated in a January report by RBC Dexia’s investment-services unit. Canada’s benchmark Standard & Poor’s/TSX Composite Index advanced 31% last year, its best performance since 1979, according to Bloomberg data.
“We should not expect this kind of market going forward,” Jim Leech, CEO of the fund, said in a statement. “After the markets bottomed out in March 2009, confidence edged back up and with that came a return to more reasonable valuations.”
Ontario Teachers said historically low interest rates continue to exacerbate an estimated funding shortfall of C$17.1 billion.
Ontario Teachers gained 21% on public and private equities; 24% on fixed income; and 4% on real estate, infrastructure, commodities and inflation-protected bonds.
The fund’s allocation was 44% in equities, 7% in fixed income and 49% in other investments at the end of 2009.