Caisse de Depot et Placement du Quebec, Montreal, returned a net 4.2% on its investments in 2018 and reported net assets of C$309.5 billion ($226.9 billion), Caisse announced Thursday.
The one-year return was above its 2.4% custom benchmark as well as the -7.7% return for the MSCI ACWI index in local currency terms. Caisse's 2017 net return was 9.3%.
The fund, which manages Quebec public pension and other provincial and municipal assets, returned an annualized 8.4% over five years vs. its 7.1% benchmark, the news release said.
Since year-end 2017, total assets have grown 3.7% from C$298.5 billion. In 2018, investments contributed C$11.8 billion, offset by net withdrawals of $800 million.
By asset class, real assets charted the best performance in 2018, with a return of 9%. Equities had a 3.5% return and fixed income, 2.1%. In 2017, real assets returned 8.7%; equities, 13.6%; and fixed income, 3.5%.
As of Dec. 31, Caisse's asset allocation was 48.9% equities, 30.5% fixed income, 19.7% real assets and the remainder in asset allocation and active overlay strategies. At the end of 2017, Caisse reported an allocation of 50% equities, 32% fixed income, 17% real assets and the remainder in asset allocation and overlay strategies.
"In 2018, our investment strategy was put to the test," said Michael Sabia, Caisse president and CEO, in a statement issued Thursday. "For the first time in several years, global stock markets finished the year in negative territory due to the beginning of monetary policy normalization, rising tariffs and geopolitical uncertainty. We achieved our objective of building a robust and resilient portfolio that performs well in these kinds of markets. The significant value added that was created this year and over five years shows that what we put into place has been effective, benefiting all Quebecers."
Caisse's performance compared against its benchmark portfolio last year represented $5.3 billion of value added for participants, while five-year performance added a total value of $16.7 billion, the news release said.
