Over the 10-year period, CDPQ returned an annualized net 7.9% return, above the benchmark's 7% figure.
The pension fund's net assets totaled C$424.2 billion ($319.9 billion) as of June 30, up from C$402 billion as of Dec. 31, which is also the end of CDPQ's fiscal year.
As of June 30, the pension fund's asset allocation was 45.2% equities, 29.9% fixed income. 24.6% in real assets, and the remainder in cash and other assets.
By asset class, equities returned a net 6.4% in the first half of 2023, below the benchmark return of 9.1%. For the five- and 10-year periods, equities returned an annualized net 10.1% and 11.8%, respectively, compared with benchmark returns of 9.3% and 10.5%.
Within equities, public equities returned a net 10.6% in the first six months of 2023, nearly matching the benchmark return of 10.7%. Private equity returned a net 1.4% over the first half of the year, below the benchmark return of 7.2%. In the short term, the private equity portfolio was "constrained by higher financing costs, which influenced the performance of certain private companies," CDPQ said in the news release.
The fixed-income portfolio returned a net 3.9% in the first half of 2023, above the benchmark return of 3.2%. For the five- and 10-year periods, fixed income returned an annualized net 1.1% and 2.6%, respectively, compared with benchmark returns of zero and 1.7%.
CDPQ said its fixed-income return was boosted by the performance of corporate credit and emerging country sovereign debt.
The real assets portfolio returned a net 1.8% in the first half of 2023, above the benchmark return of -3.1%. For the five- and 10-year periods, real assets returned an annualized net 4.8% and 7.6%, respectively, compared with benchmark returns of 4.4% and 7.6%.
CDPQ said the performance of real assets was buoyed by its investments in the renewable energy, telecommunications and transportation sectors within infrastructure, while the pension fund's exposure to real estate was impacted by the rapid rise in interest rates. "However, the portfolio's shift toward the logistics segment offset the more mitigated performance of the office sector, which is undergoing a structural transformation in light of new work habits," CDPQ said in the release.
Charles Emond, president and chief executive officer of CDPQ, said in the release: "Over the last three years, we've adjusted our portfolio to reinforce our capacity to withstand market volatility."
Mr. Emond added: "The many contradictory signals confronting investors — the direction of inflation, rates, employment and markets — make the environment challenging."