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Fully Funded OTPP Gains 10.4% in 2019

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The Ontario Teachers' Pension Plan (OTPP) just released its 2019 results, gaining 10.4% for the year as net assets reach $207.4 billion at year-end 2019: Ontario Teachers’ Pension Plan Board (Ontario Teachers’) today announced a total-fund net return of 10.4% for the year. Net assets reached $207.4 billion as of December 31, 2019, a $16.3 billion increase from December 31, 2018. Ontario Teachers’ earned $20.2 billion in investment income in 2019, the most in the organization’s history.

“Ontario Teachers’ diversified, high-quality portfolio achieved a total-fund net return of 10.4% and our net assets reached $207.4 billion to end the year,” said Jo Taylor, President and Chief Executive Officer. “The investment world since then has changed dramatically due to COVID-19, which is having an impact on all of our activities. We are highly focused on the wellbeing of our members and employees, and our team has demonstrated remarkable agility as we adapt the way we work while maintaining o…

The Next Retirement Crisis?

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Michael Santoli of CNBC reports the traditional retirement portfolio of stocks and bonds is down 20% for only the fourth time since WWII:
The coronavirus crisis has punished the blameless across the world this year. That includes investors who did the supposed “right thing,” by keeping a balanced portfolio to fund long-term gains, just as the experts advise.

As the stock-market cascaded to its recent lows this month, the traditional portfolio of 60% stocks and 40% bonds suffered a greater than 20% decline from its peak value, for only the fourth time since World War II.

At last Monday’s low, this standard retirement allocation, as represented by the Vanguard Balanced Index Fund, was 22% off its peak Feb. 19 value – driven mostly of course by the 30% tumble in equity indexes that bonds only partially buffered. In fact, near the worst of the stock sell-off bonds were not offsetting the losses by rallying, as everything but cash was liquidated.


Upon request, Ritholtz Wealth Management res…

Canada's Top 10 Pensions in Big Trouble?

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Zane Schwartz of The Logic reports Canada’s 10 biggest pension funds have lost an estimated $104 billion in public equity amid market chaos:
When the S&P 500 closed at a record high on February 19, Canada’s major pension plans, with more than a quarter of their investments in stocks, were in a comfortable position in spite of the looming coronavirus pandemic.

Five weeks later, Canada’s 10 largest pension funds — upon which millions of Canadians are relying for retirement—have lost an estimated $104 billion, according to an analysis by The Logic.

But not all pensions are created equal, and while some—including the country’s largest, the Canada Pension Plan Investment Board (CPPIB)—have high exposure to public markets, others have managed to mostly skirt the crash that has seen the S&P 500 lose roughly US$8 trillion this year.

Canada’s 10 largest pension funds have an average of 27 per cent of their assets invested in the public markets, based on an analysis of each firm’s disclo…

Coronavirus Slams Norway's Giant Fund

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Terje Solsvik and Gwladys Fouche of Reuters report that a hedge fund manager to lead Norway sovereign fund after $124 billion loss:
Norway’s sovereign wealth fund, the world’s largest, named a London-based hedge fund manager as its new chief executive on Thursday and said it had lost $124 billion this year as stock markets tanked due to the coronavirus pandemic.

Norwegian-born Nicolai Tangen, until now chief executive of AKO Capital, which he established in 2005, will take the helm in September, succeeding Yngve Slyngstad who announced his resignation last year.

“Tangen has built up one of Europe’s leading investment firms and has delivered very good financial results as an international investment manager,” Norwegian central bank Governor Oeystein Olsen said while announcing the appointment.

“He has extensive experience with equity management, which is the fund’s largest asset class,” Olsen told a news conference in Oslo.

The AKO Capital partnership has around 70 employees, managing…