Canada Pension Plan Investment Board clinched a 1.3 per cent return for the year ended March 31, capping 12 months in which rising interest rates, inflation, Russia’s war in Ukraine and geopolitical tensions weighed relentlessly on markets. 

The return was slim compared to the 6.8 per cent CPP Investments reported a year earlier. Still, the country’s largest pension fund manager narrowly beat its internal benchmark, bringing its assets under management to $570 billion, up from $539 billion last year.

“These gains—despite a significant decline in global equity and fixed income markets—were the result of our active management strategy, which enabled us to outperform most major indexes,” said CPP Investments CEO John Graham in a letter to clients. 

Here are the highlights of its results:

$8B: The firm’s net income for fiscal 2023. That’s down from $34 billion in 2022 and nearly $84 billion the year before. 

$23B: The net transfers from the Canada Pension Plan (the national retirement program for most working Canadians) that contributed to the fund’s $31-billion gain in assets. The fund attributed the greater-than-usual CPP cash flows in part to higher employment rates and an increase in the pension contribution limit. 

10%: The fund’s 10-year return rate, before adjusting for inflation (real returns for the period were 7.4 per cent). Graham emphasized the importance of these results—which have been fairly consistent year over year—relative to quarterly stats, given the fund’s mandate to maximize returns over the long term for its 21 million contributors and beneficiaries. 

-1.2%: The fund’s real estate portfolio losses. Weak performance in retail and office space assets dragged down the results, as the pandemic-era shift to e-commerce and hybrid work held strong. The portfolio returned 10.2 per cent in 2022. 

6.8%: Returns on the fund’s private equity investments. Earnings on renewable energy, health care and industrial sector assets in the U.S., Canada and Europe buoyed the results amid weaker-than-expected performance in technology and consumer discretionary investments.   

Fixed income, meanwhile, lost 0.8 per cent and public equities gained just 0.3 per cent as global stock markets continued to struggle. 

Caution ahead: The fund highlighted tense relations between China—in which 9.8 per cent of CPP Investments’ assets are invested—and both Canada and the U.S., and uncertainty around China’s regulatory environment as a primary risk. Still, it hasn’t opted to pause new investments in the market, as two large Canadian pension funds have recently done. 

At home, CPP also flagged Alberta’s potential exodus from the national pension fund as a threat to its portfolio.