The Canada Pension Plan Investment Board saw a 2.3 per cent return, net of all costs, in the second quarter of its 2020 fiscal year for its base account and a 1.9 per cent return for its additional account.
“CPPIB continued to deliver steady returns this quarter,” said Mark Machin, president and chief executive officer of the CPPIB, in a press release. “During this time, our teams continued to lay the groundwork for future value creation.”
The quarter also included some gentle adjustments to the CPPIB’s asset mix. It decreased its public equity exposure, from 32.8 per cent at the end of the first quarter to 31.9 per cent. However, it raised its exposure to Canadian stocks, from $8.1 billion to $8.2 billion, while lowering its exposure to foreign and emerging public equities.
Meanwhile, the fund grew its investments in private equity, from $95.5 billion to $98.9 billion over the quarter, raising its presence in the portfolio from 23.9 per cent to 24.2 per cent, led by foreign and emerging market investments.
In terms of bonds, the portfolio saw a small rise, from 22.1 per cent to 22.2 per cent over the quarter. However, in dollar terms, bonds grew from $88.6 billion to $90.7 billion, with the growth coming from marketable, as opposed to non-marketable, securities.
As for real assets, infrastructure was the biggest shift in percentage terms, rising from 8.3 per cent to 8.6 per cent of the portfolio, now totalling $35.2 billion in assets.
The fund’s quarterly report also emphasized its commitment to identifying and addressing environmental, social and governance issues within its portfolio. “Embedding ESG factors more deeply into our investment process advances our investment objectives,” said Machin. “Addressing risks and opportunities resulting from climate change and promoting the effectiveness of boards of our portfolio companies, for example, help us improve investment returns over the long run.”