October 25, 2000

The CPP Investment Board announced today that a program to reduce its holdings of Nortel Networks Corporation shares was substantially completed during September.

The CPP Investment Board has been investing 80 percent of its cash flow in a fund that substantially replicates the TSE 300 index (with the remainder invested in two foreign stock index funds). With Nortel comprising about one third of the TSE 300 index in recent months, about one quarter of the CPP Investment Board’s assets were invested in one security.

Until recently, the CPP Investment Board was required to invest in Canadian stocks through funds that substantially replicated stock exchange indices. In late August 2000 the federal and provincial governments finalized an amendment that allows the CPP Investment Board to invest actively as much as 50 percent of its Canadian equities.

As a result of the amended regulation, and following approval of its board of directors in September, the CPP Investment Board reduced its Nortel portfolio weight to approximately 14 percent, the lowest level possible under its asset allocation policy and the amended regulation.

This initiative reduces the concentration in the security that has dominated the TSE 300 index because of its remarkable success,” commented John A. MacNaughton, CPP Investment Board President and Chief Executive Officer. “Our Nortel position has served us well. Our decision to reduce our investment is based on a core principle of prudent risk management, namely to limit portfolio exposure to any single stock. We have not taken a view on Nortel itself.”



Mr. MacNaughton added that as the CPP Investment Board’s policy is to invest no more than 10 percent of its portfolio at market value in a single security, it will reduce the Nortel position further when changes to the regulation permit.

At the end of June, the CPP Investment Board had $4.8 billion of assets, all invested in equities. Within the decade, it expects to have more than $100 billion in assets.

The CPP Investment Board is a crown corporation created by an Act of Parliament in December 1997. It receives funds not needed by the Canada Pension Plan to pay current pensions and invests them in capital markets. Currently, cash flows are invested solely in equities to offset the approximately $30 billion bond portfolio owned by the Canada Pension Plan itself. By increasing the long-term value of funds, the CPP Investment Board will help the Canada Pension Plan to keep its pension promise to Canadians. The CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments.  

For further information contact:

John A. MacNaughton

President and Chief Executive Officer

(416) 868-4077

October 25, 2000

The CPP Investment Board announced today that a program to reduce its holdings of Nortel Networks Corporation shares was substantially completed during September.

The CPP Investment Board has been investing 80 percent of its cash flow in a fund that substantially replicates the TSE 300 index (with the remainder invested in two foreign stock index funds). With Nortel comprising about one third of the TSE 300 index in recent months, about one quarter of the CPP Investment Board's assets were invested in one security.

Until recently, the CPP Investment Board was required to invest in Canadian stocks through funds that substantially replicated stock exchange indices. In late August 2000 the federal and provincial governments finalized an amendment that allows the CPP Investment Board to invest actively as much as 50 percent of its Canadian equities.

As a result of the amended regulation, and following approval of its board of directors in September, the CPP Investment Board reduced its Nortel portfolio weight to approximately 14 percent, the lowest level possible under its asset allocation policy and the amended regulation.

This initiative reduces the concentration in the security that has dominated the TSE 300 index because of its remarkable success," commented John A. MacNaughton, CPP Investment Board President and Chief Executive Officer. "Our Nortel position has served us well. Our decision to reduce our investment is based on a core principle of prudent risk management, namely to limit portfolio exposure to any single stock. We have not taken a view on Nortel itself."



Mr. MacNaughton added that as the CPP Investment Board's policy is to invest no more than 10 percent of its portfolio at market value in a single security, it will reduce the Nortel position further when changes to the regulation permit.

At the end of June, the CPP Investment Board had $4.8 billion of assets, all invested in equities. Within the decade, it expects to have more than $100 billion in assets.

The CPP Investment Board is a crown corporation created by an Act of Parliament in December 1997. It receives funds not needed by the Canada Pension Plan to pay current pensions and invests them in capital markets. Currently, cash flows are invested solely in equities to offset the approximately $30 billion bond portfolio owned by the Canada Pension Plan itself. By increasing the long-term value of funds, the CPP Investment Board will help the Canada Pension Plan to keep its pension promise to Canadians. The CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments.  

For further information contact:

John A. MacNaughton

President and Chief Executive Officer

(416) 868-4077