OPSEU Pension Trust, Toronto, returned a net 9.6% for 2024, according to a recent report on the pension fund’s website.
For the three, five and 10 years ended Dec. 31, OPTrust had average annualized net returns of 4.1%, 7.2% and 7%, respectively. Benchmark returns were not provided.
In 2023, OPTrust return a net 5.3%.
The pension fund had a total of about C$26.9 billion ($18.7 billion) in net assets as of Dec. 31, up from C$25.5 billion at the end of the prior year, according to OPTrust’s 2024 Funded Status Report.
By region, the pension fund had 46% of its assets invested in the U.S., followed by 34.8% in Canada (including 14.9% in Ontario); 10.2% in Europe, 8.4% in Asia-Pacific and 0.6% in Latin America.
The pension fund’s assets are divided into four subportfolios: liability-hedging portfolio, return-seeking portfolio, risk-mitigation portfolio and funding portfolio, according to the 2024 Funded Status Report.
The liability-hedging portfolio is designed to help manage funded status volatility by mitigating risk associated with changes to the discount rate of the plan’s pension liabilities.
In 2024, the LHP had a modest net return of 1.5%, as the “Canadian government bond prices were little changed on the year despite considerable volatility throughout 2024,” OPTrust said in the report.
LHP accounted for 25.2% of the pension fund’s assets.
The return-seeking portfolio is designed to deliver a diversified source of return from riskier assets, and it consists of illiquid assets such as private equity, infrastructure and real estate investments, and liquid assets such as public equity, credit and commodities investments.
The RSP delivered a net return of 8.7% in 2024 and accounted for the bulk (86.8%) of the pension fund’s assets.
Within RSP, the top allocations were in private equity (19.7%), infrastructure (16.8%), public equity (16.6%), real estate (16.4%), credit (8.1%), multistrategy investments (4.9%), commodities (3.6%) and other (0.7%)
Within RSP, the best performers were public equity, with a net return of 21.3%, followed by private equity (14.4%), other (13.5%), multistrategy investments (9.8%), credit (9.5%), infrastructure (6.7%) and commodities (1.7%). The poorest performer was real estate (-4.5%).
The risk-mitigation portfolio is designed to enhance pension security by helping to reduce the long-term impact of severe market drawdowns on the pension plan’s funding ratio. In 2024, the RMP returned a net 33.9%, mostly driven by the portfolio’s exposure to gold, held in both static and dynamic strategies.
RMP accounted for 7.7% of the pension fund’s assets.
The funding portfolio manages the pension plan’s funding and liquidity reserves that are needed to implement its investment strategy and manage day-to-day liquidity requirements.
The funding portfolio accounted for -19.7% of pension fund’s assets.
