Caisse de Depot et Placement du Quebec, Montreal, returned a net 9.3% on its investments in 2017, helping increase its overall assets to C$298.5 billion ($237.8 billion), the Caisse announced Wednesday.
The one-year return was above its 9.2% custom benchmark but below the 9.7% median return of Canadian pension plans surveyed by RBC Investor & Treasury Services. Caisse's 2016 return was a net 7.6%.
Caisse, which manages Quebec public pension and other provincial and municipal assets, returned an annualized 10.2% over five years vs. its 9.1% benchmark.
Total assets as of Dec. 31 were up 10.3% from the end of 2016. Investments in 2017 contributed C$24.6 billion; net deposits totaled C$3.2 billion.
Equity was the top-performing asset class for 2017, with a return of 13.6%; followed by real assets, 8.7%; and fixed income, 3.5%. In 2016, equities returned 9.4%; real assets, 11.9%; and fixed income, 2.9%.
Caisse's overall asset allocation as of Dec. 31 was 50% equities, 32% fixed income, 17% real assets, and the remainder in asset allocation and overlay strategies for which Caisse did not provide returns. At the end of 2016, the allocation was 49% equities, 33% fixed income, 17% real assets and the remainder in asset allocation and overlay strategies.
In 2017, Caisse saw a 5.1% return in the credit portion of its fixed-income portfolio vs. a 1.8% return for its rate, or government bond, portfolio, Michael Sabia, Caisse president and CEO, said Wednesday in a conference call with reporters. However, its equity returns were mitigated by the rise of the Canadian dollar vs. the U.S. dollar, which made the S&P 500 return 14% in Canadian-dollar terms vs. 22% in U.S. dollars, he said.
In infrastructure and real estate, Mr. Sabia said Caisse will increase investments in greenfield projects and emerging markets real estate.