Pension Pulse

Sarah Rundell of top1000funds reports on how CPP Investments uses leverage and what are the lessons for CalPERS: As CalPERS adopts a new asset allocation that adds 5 per cent  leverage to the entire portfolio, board members gathered key insights on how the strategy will work including the lessons from Canada Pension Plan Investments which currently applies 22 per cent leverage to the portfolio. Edwin Cass, chief investment officer of Canada Pension Plan Investments (CPP Investments) shared the experience of the C$541.5 billion Canadian fund where a seasoned leverage strategy adds diversification and maximises returns without increasing risk. Cass explained to CalPERS’ board members that many people associate the use of leverage with increased risk. Although leverage can be used to increase risk, CPP Investments’s use of leverage leaves its risk tolerance unchanged. The Canadian fund invests based on a mandate to maximise returns without undue risk or loss...

Hannah Mio and Yun Li of CNBC report the Dow gains more than 500 points in best day of 2022 to wrap up wild week: U.S. stocks rallied into the close Friday to wrap up a roller-coaster week, buoyed by rebounding technology stocks. The Dow Jones Industrial Average rose 564.69 points, or 1.7%, to 34,725.47. The blue-chip average posted its best day since Dec. 6 after being down more than 350 points at its lows. The S&P 500 added 2.4% to close at 4,431.85 — its best session since June 2020. The Nasdaq Composite rallied 3.1% to 13,770.57. Shares of Apple jumped nearly 7% after a stellar quarterly results, boosting the stock averages. The company reported its largest single quarter in terms of revenue ever even amid supply challenges and the lingering effects of the pandemic. Big Tech names Microsoft, Amazon, Facebook-parent Meta and Google-parent Alphabet all closed Friday higher after being beaten up earlier in the week, providing support to the indexes. On the downside, Che...

Imogen-Rose Smith, contributing editor at ImpactAlpha, wrote a comment this week, O Canada, how do your pension plans get high ESG scores when you’re up to your neck in tar-sands oil? : When in doubt, publish a list. It’s a media truism.  The trick works for not-for-profits too. New America, a Washington D.C. think tank, put itself on the ESG map with a biennial list of the world’s most “responsible” global institutional asset owners, the behemoth pension, insurance and sovereign wealth funds that own the global economy. The most recent Responsible Asset Allocators Index, or RAAI, came out in November. The index suggests progress on responsibility, albeit plodding, among global asset owners, with the average score reaching 52% in 2021, up from 48% in 2019 and 44% in 2017. But let’s be blunt: the list is stupid.  I should be more kind – new year, new me and all that. And I’ve overseen plenty of dumb lists in my time (RIP Trader Monthly ). But it’s a disservice t...