Home > News > Asset Allocation > CPP Investments Increases Net Assets to $529 Billion at End of Second Quarter 2023
Asset Allocation

CPP Investments Increases Net Assets to $529 Billion at End of Second Quarter 2023

In Q2 2023, the CPP fund returned 0.2% while increasing total assets by $6 billion.
By Dusty Hagedorn

Toronto-based Canada Pension Plan Investment Board, and its’ investment arm CPP Investments, increased its total assets in the second quarter of fiscal 2022, which ended on September 30, to $529 billion, compared to $523 billion at the end of Q1.

The $6 billion increase in net assets for the quarter consisted of $1 billion in net income and $5 billion in net transfers from the Canada Pension Plan (CPP).

The Fund, which includes the combination of the base CPP and additional CPP accounts, achieved 5– and 10-year annualized net returns of 8.5% and 10.1%, respectively.

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For the quarter, the Fund returned 0.2%, Over the same period, the S&P/TSX index, a capitalization-weighted index designed to measure market activity of stocks listed on the Toronto Stock Exchange, fell by 2.2%.

For the six-month fiscal year-to-date period, the Fund’s net return was down 4%.

The Fund’s quarterly results were adversely affected by broad declines in global public and private equity markets and in fixed income markets; however, the decline in value was offset by gains in U.S. dollar-denominated private equity, real estate and credit investments—which benefitted from foreign exchange gains—and by positive returns on investments in energy and infrastructure.

The Fund also acquired a stake in Universal Investment , a leading third-party management company and fund administration service provider serving both institutional investors and asset managers across European fund markets.

The fund additionally completed $82 million worth co-investments alongside private equity sponsors during the quarter.

In terms of real asset investment activity, the Fund by $565 billion, to a total of $1.2 billion, and invested $975 million into European real estate. In addition, the fund invested another $125 million in funds investing in equity and sustainability focuses.

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Norway’s Pension Giant Lost $215 Billion in First Three Quarters

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Home > News > Risk > As Beijing Relaxes Pandemic Rules, Chinese Stocks Rally
Risk

As Beijing Relaxes Pandemic Rules, Chinese Stocks Rally

China’s stocks and its economy have been slammed by the draconian restrictions.  

By Larry Light

The Beijing regime appears to be moving away from its harshest COVID-19 restrictions, which have arguably stifled growth in the world’s second largest economy. Result: Battered Chinese stocks are staging a rally.

Since the announcement of the regulation easing last Thursday at a Politburo meeting, the iShares MSCI China exchange-traded has risen 6%. Since last October, when the Chinese government further tightened its rules and imposed harsher lockdowns, the stock gauge is down by more than a third.

The Politburo last week moved to reduce the number of quarantine days for close contacts and inbound travelers, allow home quarantine, stop tracking secondary close contacts and limit testing requirements, among other things.

Ajay Kapur, Head of Asia Pacific Strategy Research at Bank of America Corporation, applauded “nascent signs of reversal” of the regime’s tough pandemic rules. After two years of hesitancy about Chinese stocks, Kapur wrote in a research note that the bank had turned “tactically constructive on China.”

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Meanwhile, Winnie Wu, a China equity strategist at Bank of America, commented in another note that the changes “should boost market confidence on China’s reopening and recovery.”

She indicated the Politburo action likely will lead many investors to rethink their heretofore underweight approach to the Chinese market. “Large, liquid and index-heavy stocks and high beta stocks are likely to lead the performance,” Wu added.

Pantheon Macroeconomics’ chief China economist, Duncan Wrigley, depicted the rule relaxations as marking “China’s first step along the exit path and confirm the view of leadership pragmatism.”

In a research piece, he also pointed out that the government, in talks with Germany’s officials, might possibly approve Bio-NTech SE’s mRNA vaccine for use in China. Chinese vaccines have been criticized as weak and even ineffective, while the German drugmaker’s product has a much higher rating from international health experts.

In addition, Beijing is increasing government aid to buoy the economy, in particular the battered real estate sector.

Chinese stocks are also on the upswing due to the relatively cordial meeting between Chinese President Xi Jinping and U.S. President Joe Biden, after a long period of U.S.-China tensions, on Monday at the G20 Summit in Bali, Indonesia.

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