November 09, 2007
TORONTO, ON (November 9, 2007): The CPP Fund grew to $121.3 billion for the quarter ended September 30, 2007, an increase of $0.8 billion from $120.5 billion at the end of the previous quarter, and an increase of $4.7 billion for the first six months of the fiscal year.
The $0.8 billion growth for the quarter was primarily due to inflows of CPP contributions not needed to pay current pension benefits, while investment earnings of negative $56 million represented essentially a flat rate of return for the quarter. The results reflected the recent volatility in financial markets generally and the negative impact of the strengthening Canadian dollar on foreign investment returns.
For the first half of the fiscal year, the growth of $4.7 billion was comprised of $4.0 billion in CPP contributions not needed to pay current pension benefits and $0.7 billion in investment income, representing an investment rate of return of 0.67 per cent.
The CPP Investment Board emphasizes four-year results to reflect its long-term investment horizon. For the four-year period ended September 30, 2007, the CPP Fund earned $38.6 billion in investment income, representing a rolling four-year annualized investment rate of return of 11.5 per cent.
At September 30, 2007, equities represented 64.6 per cent of the fund or $78.4 billion. That amount consisted of 56.5 per cent public equities valued at $68.5 billion and 8.1 per cent private equities valued at $9.9 billion. Nominal fixed income, which includes bonds and money market securities, represented 24.9 per cent of the portfolio or $30.2 billion. Inflation-sensitive assets represented 10.5 per cent or $12.7 billion. Of those assets, 5.1 per cent consisted of real estate valued at $6.2 billion, 3.3 per cent was inflation-linked bonds valued at $4.0 billion and 2.1 per cent was infrastructure valued at $2.5 billion.
The Chief Actuary of Canada estimates that CPP contributions will exceed annual benefits paid through 2019, providing a 12-year period before a portion of the CPP Fund’s investment income is needed to help pay CPP benefits.
The Chief Actuary also forecasts that the CPP Fund will grow to approximately $250 billion by 2016, making it one of the largest single-purpose pools of investment capital in the world, thereby helping to secure the CPP for the long term.
CPP Investment Board
The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income. The CPP Investment Board is accountable to Parliament and the federal and provincial finance ministers. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. For more information about the CPP Investment Board, visit www.cppib.ca.
For further information contact:
Joel Kranc
Manager
Communications
(416) 874-5163
jkranc@cppib.ca
November 09, 2007
TORONTO, ON (November 9, 2007): The CPP Fund grew to $121.3 billion for the quarter ended September 30, 2007, an increase of $0.8 billion from $120.5 billion at the end of the previous quarter, and an increase of $4.7 billion for the first six months of the fiscal year.
The $0.8 billion growth for the quarter was primarily due to inflows of CPP contributions not needed to pay current pension benefits, while investment earnings of negative $56 million represented essentially a flat rate of return for the quarter. The results reflected the recent volatility in financial markets generally and the negative impact of the strengthening Canadian dollar on foreign investment returns.
For the first half of the fiscal year, the growth of $4.7 billion was comprised of $4.0 billion in CPP contributions not needed to pay current pension benefits and $0.7 billion in investment income, representing an investment rate of return of 0.67 per cent.
The CPP Investment Board emphasizes four-year results to reflect its long-term investment horizon. For the four-year period ended September 30, 2007, the CPP Fund earned $38.6 billion in investment income, representing a rolling four-year annualized investment rate of return of 11.5 per cent.
At September 30, 2007, equities represented 64.6 per cent of the fund or $78.4 billion. That amount consisted of 56.5 per cent public equities valued at $68.5 billion and 8.1 per cent private equities valued at $9.9 billion. Nominal fixed income, which includes bonds and money market securities, represented 24.9 per cent of the portfolio or $30.2 billion. Inflation-sensitive assets represented 10.5 per cent or $12.7 billion. Of those assets, 5.1 per cent consisted of real estate valued at $6.2 billion, 3.3 per cent was inflation-linked bonds valued at $4.0 billion and 2.1 per cent was infrastructure valued at $2.5 billion.
The Chief Actuary of Canada estimates that CPP contributions will exceed annual benefits paid through 2019, providing a 12-year period before a portion of the CPP Fund’s investment income is needed to help pay CPP benefits.
The Chief Actuary also forecasts that the CPP Fund will grow to approximately $250 billion by 2016, making it one of the largest single-purpose pools of investment capital in the world, thereby helping to secure the CPP for the long term.
CPP Investment Board
The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income. The CPP Investment Board is accountable to Parliament and the federal and provincial finance ministers. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. For more information about the CPP Investment Board, visit www.cppib.ca.
For further information contact:
Joel Kranc
Manager
Communications
(416) 874-5163
jkranc@cppib.ca
