This Bloomberg headline typifies the classic spin that leftist corporate media hacks excel at. You can read enough of the article before the paywall blurs it out to see that a lousy rate of return is not so lousy because, well, it could have been even lousier. This is how a decline magically turns into a “boost”.
Canada Pension Plan Investment Board earned 1.3% …. as declines in equity and fixed income markets eroded the benefits of a weaker Canadian dollar and gains in infrastructure.
As far as the benefits of a falling currency go, if that were the key to prosperity Zimbabwe should be the richest nation on earth. Since most “infrastructure” projects these days are money-losing boondoggles, that angle won’t get very far either.
Yahoo Finance has a more straightforward analysis if you want to dig deeper without paying up front for spin doctoring.
Dunno if this link works, probably not:
https://www.bloomberg.com/news/articles/2023-05-24/canada-pension-posts-1-3-return-boosted-by-weak-loonie
Try
https://archive.ph/k8k3I#selection-3559.0-3577.26
The CPP.. Smoke, drink and work until your dead.. Would you like fries with that?..
I live in Mexico. The Canadian dollar is off about 15% against the peso this year, as is the US dollar. Add in actual inflation of about 15% in both countries, offset against the 6% increase to our OAS in January and it really starts to bite. Canadians don’t realize this because they’re fixated on the relationship between the Canadian and US currencies, both of which are sinking into the swamp. Fighting the fight on the backs of retirees for the benefit of government “workers”, as always.
We are in the tail end of an election campaign in Alberta. Notley and the NDP are fear mongering over the UCP’s plan to bring the CPP home to Alberta. With returns like this, I would love to see better money managers deal with our pension!
Invest in what you know, in Alberta like;
CNRL
Suncor
Encana
Cenovus
Etc
”… gains in infrastructure” ?
What? What a nonsensical non sequitur. Pure political-speak
Don’t laugh about infrastructure investments, Kenji.
That Brooklyn Bridge some fellow sold the pension fund several years ago has skyrocketed in value. ;o)
Infrastructure COULD be gains, if it was something that benefited all; roads, or a pipeline, or railway that transported goods to markets, foreign and domestic. A refinery, a power plant (nuclear or otherwise). If they are making us pay for it through taxes, we might as well realize the benefits as well, lower price for domestic use of the (saleable) product (why should we sell to anyone for below market value, that should be reserved for tax paying citizens. Use of the resources of the provinces, if your provinces have coal, use coal, you can burn coal efficiently, meanwhile, it takes so long to go nuclear, might as well start now. Forget about unreliables, they are niche. Not worth the mess they will create over their lifespans, as we ‘transition’.
Alaska gives back to it’s citizens in the form of a prosperity cheque..
That would be an effective form of ‘socialism’, instead of the mess they are trying to ram down everyone’s throats..
I suspect Canada’s definition of “infrastructure” now includes … “human infrastructure”. So you’ve bought a lot of indigenous drum circles to entertain the white folk? Yeah … that’s quite an “investment” in Canada.
How much has their ESG investments helped? Who needs returns when you can satisfy the loons.
I feel like an inverse ESG ETF would do well.
I’m sure the CPPIB is using the full range of Government Accepted Accounting Tricks (GAAT) to even show that much of a return.
I also wonder how much exposure they have to long term bonds that are underwater.
Undoubtedly there is a lot of exposure. I like your term GAAT. But now that the rules have been changed, capital losses don’t have to be acknowledged until time of sale. What a sweet deal!
I started collecting CPP at 62 .As I was self employed ,I had to pay both the employee and employer contribution . This cost $4600 and increased my monthly payout by about $18 or $216 per year. After a little over 21 years I will have my money back. At the time they were claiming 8% annual return. I guess math is hard. My recollection of the monthly increase could be slightly off either way as it was a while ago, but not much.
“ As far as the benefits of a falling currency go, if that were the key to prosperity Zimbabwe should be the richest nation on earth” Exactly!
Years ago I repeatedly tried to persuade grain growers that they were wrong to think a low dollar was a benefit by making wheat easier to sell to the world.
They would disagree….because the CWB assured them it was a good thing.
Id ask them, where was your tractor, combine, TV or shucks even your shirt made? Did they spend their money?
Id add if it is true that a weak dollar is so good for exports then let’s lower it to .50 against the US dollar and then we could really move our wealth fast.
From here – https://www.cppinvestments.com/wp-content/uploads/2023/05/CPP-Investments_F2023-Annual-Report.pdf
Page 34
“CPP Investments ended its fiscal year on March 31, 2023, with net assets of $570 billion, compared to $539 billion at the end of fiscal 2022. The $31 billion increase in net assets consisted of $8 billion in net income and $23 billion in net transfers from the Canada Pension Plan (CPP).”
So with $539B invested the profit was $8B.
I think I found the $23B on Page 96 which lists Transfers FROM the CPP as $66,598M and Transfer TO the CPP (which I believe are pension payments to retirees) as $43,698M which is a difference of $22.9B.
On page 70 the report discusses “Portfolio Carbon Footprint”. What the F does that have to do with reality?
The average CPP payout is $717 per month. If you want to eat steak when you’re retired you better look after your own finances.