For the five-, 10-, 15- and 20-year periods ended March 31, BCI, which is British Columbia's public pension manager, delivered annualized net returns of 7.2%, 8.5%, 7.3% and 8.4%, respectively. These figures compared to respective benchmark net annualized returns of 5.8%, 7.2%, 6.5% and 7.5%.
In the previous fiscal year, BCI returned a net 7.4%, above the 4.6% net return of the benchmark.
BCI's asset allocation as of March 31 was 29.6% fixed income; 28.3% public equities; 16.8% real estate equity; 13.2% private equity; 10.4% infrastructure and renewable resources; private debt 6.3%; real estate debt 3.7%; and -8.4% for BCI's funding program, which includes "clients' investment liabilities achieved through government bond repurchase agreements managed by BCI," based on figures in the news release.
Infrastructure and renewable portfolio was the best performing asset class, generating a 9.2% net return (compared with a benchmark net return of 6.4%). This segment outperformed "due to our regulated utility assets exposure, which has been resilient to rising interest rates, and strong capital appreciation," BCI added in the release.
The real estate equity portfolio delivered a net return of 7.2% (benchmark 6.9%). This area outperformed due to "an overweight sector allocation to industrial, residential, and alternative assets, with geographic diversification, including now managing industrial real estate assets in the United States, thereby protecting the portfolio from market volatility."
Private equity returned a net 4.7% (benchmark -10.4%) The real estate debt portfolio returned a net 4.6% (benchmark 3.3%) and it outperformed "due to the floating rate loans, which make up about 80% of the portfolio, as these loans adjust to the higher interest rates."
Within public markets fixed income, short-term fixed income returned a net 5.8%, private debt returned a net 4.6%, other strategies, including leverage liabilities returned 3%, while nominal bonds returned a net -2.1%.
Overall, public markets fixed income returned a net -0.6% for the year ended March 31, compared with -1.5% for benchmark, said a spokeswoman for BCI by email. The public markets fixed income portfolio outperformed "due to disciplined credit selection and BCI's ability to take on larger loan allocations," the release noted.
Within public equities, global public equities returned a net 2.3%, emerging markets equity returned a net 0.3% and Canadian public equity returned -3.1%.
Overall, public equities returned a net 1.1% for the year period, compared with a benchmark of -0.6%, the spokeswoman added.
Public equities outperformed "due to our focus on investing in high-quality companies especially as equity markets dampened while central banks tried to rein in inflation," BCI noted in the release.