The Ontario Municipal Employees Retirement System’s portfolio lost 2.7 per cent, net of expenses, last year as the coronavirus pandemic hammered its investments.
According to the pension fund, widespread lockdowns in investments that included retail properties and the transportation and entertainment sectors explained more than half of the shortfall to its benchmark for the year.
Its portfolio also holds significant allocations to dividend-paying financial services and energy businesses, sectors that did not fully recover during the market rally at the end of last year.
The OMERS said it was also hurt by a rebound in the Canadian dollar after it fell sharply at the start of the pandemic.
The fund manages investments to pay pensions for municipal employees from communities across Ontario. Its funded status on a smoothed basis remained at 97 per cent.
“We are a long-term investor that pays pensions over decades, and with a strong team and strategy in place, this single year will not define us,” said OMERS chief executive Blake Hutcheson in a statement.
“We are active investors and asset managers with high-quality assets diversified globally and we believe in the strong investment future that our portfolio represents for over 500,000 members and our more than 1,000 employers in Ontario.”