American Investments Help Carry CPP Investments Forward, While Europe Lags
Posted on 05/24/2023
Canada Pension Plan Investment Board (CPP Investments) ended its fiscal year on March 31, 2023, with net assets of C$570 billion, compared to C$539 billion at the end of fiscal 2022. The C$31 billion increase in net assets consisted of C$8 billion in net income and C$23 billion in net transfers from the Canada Pension Plan (CPP). CPP Investments received greater than usual net CPP cash flows in fiscal 2023 due to higher employment rates, an increased limit to the year’s maximum pensionable earnings, an increase to additional CPP contribution inflows, and a lump-sum inflow in the fourth quarter due to forecasting adjustments made by the CPP.
The Fund, which includes the combination of the base CPP and additional CPP accounts, achieved a net return of 1.3% for the fiscal year.
Despite spending mounds of cash opening up offices in regions globally, the U.S. has been a key driver of portfolio return for the pension investor.
Annualized Net Returns by Geographic Region for CPP Investments
| Geographic Region | 5-Years Ended March 31, 2023 | 5-Years Ended March 31, 2022 | 5-Years Ended March 31, 2021 |
|---|---|---|---|
| United States | 9.8% | 10.4% | 10.8% |
| Asia Pacific | 5.1% | 8.0% | 6.2% |
| Canada | 4.9% | 5.2% | 5.3% |
| Latin America | 6.0% | 6.7% | 7.6% |
| Europe | 3.1% | 5.5% | 6.2% |
Geographic Asset Allocation by Net Investments for CPP Investments
| Fiscal Year – March 31 | U.S. | Asia Pacific | Europe | Canada | Latin America | Other |
|---|---|---|---|---|---|---|
| Mar-23 | 36.0% | 26.0% | 18.0% | 14.0% | 6.0% | |
| Mar-22 | 36.0% | 26.0% | 16.0% | 16.0% | 6.0% | |
| Mar-21 | 36.9% | 27.0% | 15.6% | 15.7% | 3.8% | 1.0% |
| Mar-20 | 35.2% | 28.3% | 15.5% | 15.6% | 4.0% | 1.4% |
| Mar-19 | 33.5% | 26.5% | 19.4% | 15.5% | 3.8% | 1.3% |
| Mar-18 | 37.5% | 24.5% | 18.8% | 14.6% | 3.4% | 1.2% |
Source: SWFI.com. Adjustments made to simplify regions.
