The Canada Pension Plan Investment Board (CPPIB) posted a loss of 4.2% last quarter, or roughly $16 billion—that sounds bad, but it actually outperformed the market (the S&P/TSX Composite Index fell nearly 9% in the same time frame) and other Canadian pension plans.
Why it matters: The CPPIB manages the money that eventually gets paid out in our golden years via the Canada Pension Plan, so we all have an interest in them investing wisely.
- The CPPIB has been dragged down by real estate, credit, and fixed income investments (like bonds), reflecting the broader market downturn.
With more than $500 billion in assets under management (and a seemingly endless stream of contributions coming out of every Canadian’s paycheque), the CPPIB is well-positioned to weather the market’s ups and downs.
Bottom line: The CPPIB’s headline losses may look bad, but there’s no reason to worry. Over the past ten years, the board has seen 10.3% annualized returns, well above what it needs to continue cutting cheques to Canada’s seniors for decades to come.