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Canada Pension Plan Investment Board, the country’s largest pension fund, posted a negative 4.2 per cent return in its fiscal first quarter, hurt by a broader sell-off in global equities.
The fund ended the quarter with net assets of $523 billion, CPPIB said Thursday. Private equity, credit and real estate investments also contributed “modestly” to the decline, the fund said.
Global equity markets have been hammered this year as accelerating inflation -- and central banks’ interest-rate increases to combat it -- have weighed on corporate earnings and prompted fears that a recession may be in the offing. The rate hikes have also hurt bond prices, another major asset class for CPPIB.
“Financial markets experienced the most challenging first six months of the year in the last half century, and the Fund’s first fiscal quarter was not immune to such widespread decline,” Chief Executive Officer John Graham said in the statement. “The uncertain business and investment conditions we noted in the previous quarter continue, and we expect to see this turbulence persist throughout the fiscal year.”
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The fund’s five-year annualized net nominal return fell to 8.7 per cent, from 10 per cent as of the quarter ended March 31, while its 10-year return slipped to 10.3 per cent from 10.9 per cent.