As years of zero percent interest rates continue to exact a steep price from Canadian savers, wouldn’t it be nice if investors could just opt out of this gigantic Ponzi scheme?
Canada Pension Plan Investment Board, the country’s largest pension fund, posted a negative 4.2% return in its fiscal first quarter, hurt by a broader sell-off in global equities.
As against the benchmark S&P 500 index?
You have missed the point.
Check the top of your head.
I never asked for money to be taken from my pay cheque and poorly invested.
When it gains, you get nothing. When it loses, you pay. Hell of a great deal for the government.
And people let that happen.
Get the Ontario Teachers Union to run it.
+1 The Ontario Teachers Pension Plan – bingo!
They sure knew how to fleece those Maple Leaf fans.
Some years ago Andrew Coyne in the NP was quite critical of how big the CPP management team had become (numbers escape me but I seem to recall several dozen to ~ 1000) and the fact that the CPP had switched from passive management to active management with the latter obviously costing more to operate. One of the dictums in PoliSci is that a bureaucracy, to ensure its survival, will grow as large as it can. (See National Capital Commission..)
The corollary to that is a charity/non profit, to ensure its survival, will grow as large as it can, (and ensure that the problem never gets solved.) see homelessness, poverty, drunk driving etc…. One can even use the example of bilingualism where the % of french speakers in any given organization has continuously increased to include lower and lower levels of management and the standard to speak french has risen to become unobtainable even by Voltaire. see Canadian Armed Forces….
Cancer is a notable charitable cause that hasn’t succeeded.
I recall reading a number of years ago that various large pension funds had to at least partially switch to active management as interest rates had declined to such an extent that passive investing in bonds, etc. would not provide an adequate return to cover future obligations. Then again, there is risk.
From the Fraser Institute:
“The CPPIB has performed reasonably well over this time period, report- ing an average rate of return of 7.9 percent (figure 1). Further, the CPPIB’s 10-year real rate of return of 6.2 percent (CPPIB, 2015), after expenses, is
above the 4 percent real rate of return that the Chief Actuary of Canada assumes in assessing the sustainability of the CPP.
While not directly comparable to the TSX, due to the composition of investments in the CPPIB versus the TSX, it nonetheless markedly outperformed the TSX. Specifically, over the 16-year period starting in 2000 through to 2015, the CPPIB earned rates of return higher than the TSX in 12 years, or 75 percent of the time. The average annual rate of return for the TSX over this period was 4.2 percent (CPPIB, 2008, 2015). The CPPIB has performed reasonably well in generating positive rates of return for the CPP.”
https://www.fraserinstitute.org/sites/default/files/rates-of-return-for-the-canada-pension-plan.pdf
I want to know why they advertise on Bnn Bloomberg ?? It’s not like we have a choice if they get our money.
” After AgCoA, the Canada Pension Plan Investment Board acquired a second tranche of farmland assets when it paid $2.5 billion for a 40% stake in Glencore Agricultural Products in 2016. The very next year, however, the Canada Pension Plan Investment Board began shedding these very same farmland assets as quickly as it had acquired them.
And it did this so quietly one might even say it was done in secret.
There was no public announcement, and no notice in the business press. Instead, the Canada Pension Plan Investment Board revealed in the fine print of a quarterly statement that it had sold $520 million in U.S. farmland assets held by Agriculture Company of America. Credit Chris Janiec at Agri Investor for this eagle-eyed investigating. The Americas Editor at Agri Investor, Janiec reported that the assets had been offered as a single block and “that Microsoft founder Bill Gates is thought to be the buyer of CPPIB’s farmland.”
$520 million for a $2.5 billion investment, makes you wonder who they are working for ??
https://www.agriculture.com/farm-management/farm-land/bill-gates-is-about-to-change-the-way-amer-ca-farms
Dave, Wondering? It’s pretty obvious it’s not the people of Canada who were forced to pay into the plan for many many years. Do you think that evil people like Gates and Soros et al, use their own money to fund their lofty lefty plans for people like us?
It’s to ensure loyalty to the government. “Criticise us and we won’t buy advertising time from you.”
Same goes for Canada Deposit Insurance.
They tried the investment in Ontario farmland when the US midwest dry year of 2011 spiked Cdn farm incomes and farmland values. They got out when they realized ‘farmland investment only incurs in value due to inflation over the long term ‘ or something like that. Advice they could have gotten buying a round of coffee at any hick town coffee shop and not the Starbucks type
What percentage of the CPP’s investments are in Western Canadian Energy? You know, the sector that has seen a 250% increase on the past year. Or have their “independent” board members directed that they go all woke and full Trudeau; and ditch any investment in the only Canadian economic sector that actually makes money?
But they could save themselves (and us)! Sell all the cannabis stock and buy the TSX oil and gas index; it is still woefully undervalued and is a sure bet to pay excellent dividends for the foreseeable future. Would also serve to support Canadian companies and might even attract the capital investment that they (and we) badly need.
Related: https://spectatorworld.com/topic/esg-tyranny-editorial
To be fair, my personal investments took a substantial hit recently with the stock market downturn.
It may have served a purpose once upon a time before mutual funds were invented. Its demise was ensured when the birth control pill was released.