By Embracing Commodities and Infrastructure Earlier, Ontario Teachers’ Plan Generates Positive Return for the 1H 2022
Posted on 08/15/2022
Ontario Teachers’ Pension Plan Board announced a total-fund net return of 1.2% for the six-month period ended June 30, 2022, while the 12-month total-fund net return was 8.3%. Net assets grew to C$ 242.5 billion.
“In a tumultuous time for global markets and with the highest inflation rates we have seen in decades, we were able to deliver positive returns for our members and continue to make progress towards our goal of reaching $300 billion in net assets by 2030,” said Jo Taylor, President and Chief Executive Officer in a press release. “These results show that diversification, active management and an agile investment approach enable us to generate returns in a wide array of investment environments and position us well to navigate through what is likely to be a challenging investment landscape over the next few years.”
A large reason for the positive performance is that OTPP had allocation to performing asset classes of inflation-sensitive, infrastructure, and absolute return strategies asset classes, which were partially offset by losses in public equities, venture growth, and credit. Over the last twelve months, OTPP tilted its asset mix toward a more inflationary regime allocation, which embraced more commodities and infrastructure. At June 30, 2022, OTPP only had a 9% allocation to listed stocks. For that same period, OTPP had 12% allocated to commodities and 4% allocated to natural resources.
“Our diversified portfolio performed well and as designed, delivering positive returns despite a highly inflationary environment that saw losses in most major stock and bond indices. We saw positive returns in our inflation-sensitive, infrastructure and absolute return strategies asset classes, which were partially offset by losses in public equities, venture growth and credit,” added Ziad Hindo, Chief Investment Officer. “The fund has benefited from our deliberate efforts over the last 12 months to tilt the asset mix towards those that perform well in inflationary environments, particularly commodities and infrastructure.”
Keywords: Ontario Teachers Pension Plan.
