Canada Pension Plan Investment Board, Toronto, returned a net -4.2% for the quarter ended June 30, the first quarter of its 2023 fiscal year, said a news release Thursday.
CPPIB, which manages the assets of the Canada Pension Plan, said the pension fund's net assets totaled C$523 billion ($406.1 billion) as of June 30, down 3% from C$539 billion three months earlier.
The C$16 billion quarterly decrease in net assets consisted of a net investment loss of C$23 billion and C$7 billion in net transfers from the plan, the board said in the news release.
For the five and 10 years ended June 30, the portfolio returned an annualized net 8.7% and 10.3%, respectively, CPPIB added.
In the first quarter of fiscal year 2022, the fund had returned a net 3.5%.
CPPIB has a fiscal year-end of March 31.
CPPIB attributed the first-quarter fiscal 2023 results to "losses in public equity strategies, due to the broad decline in global equity markets," while investments in private equity, credit and real estate "contributed modestly to the losses this quarter." However, gains by external portfolio managers, quantitative trading strategies and investments in energy and infrastructure "contributed positively to this quarter's results," the release added.
The pension fund's fixed-income investments also incurred losses in the quarter "due to higher interest rates imposed by central banks to fight inflation," however these losses were offset by foreign-exchange gains of $3.1 billion as "the Canadian dollar weakened against the U.S. dollar," CPPIB said in the release.
A CPPIB spokesman said in an email that it does not provide benchmark performance data and provides a full asset breakdown and individual asset performances only for year-end in the annual report.
"Financial markets experienced the most challenging first six months of the year in the last half-century, and the fund's first fiscal quarter was not immune to such widespread decline," said John Graham, president and CEO, in the release. "However, our active management strategy — diversified across asset classes and geographies — moderated the impact on the fund, preserving investment value."
Mr. Graham added that the "uncertain business and investment conditions we noted in the previous quarter continue, and we expect to see this turbulence persist throughout the fiscal year."
By region, as of June 30, the plan's asset allocation was 35.6% U.S., 27.3% Asia-Pacific, 15.9% Canada, 15.7% Europe and the rest in Latin America, according to a financial statement issued in conjunction with the release.
