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CAAT Pension Plan Gains 16% in 2019

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Yaelle Gang of the Canadian Investment Review reports that CAAT pension plan returns 16% in 2019, well-positioned to weather coronavirus storm:
The Colleges of Applied Arts and Technology pension plan saw a strong 2019, delivering a 16 per cent return, net of investment management fees, while growing its assets under management to $13.5 billion.

“On an absolute basis, all asset classes contributed positively to returns in 2019, with global developed equity, long bonds and real assets being the largest contributors,” said the annual report. “Interest rate and inflation hedging asset classes returned 11 per cent in aggregate, while return-enhancing asset classes returned 20.5 per cent. The plan’s currency hedging policy added 1.8 per cent to returns.”

For 2019, the CAAT plan is 118 per cent funded on a going-concern basis.

While 2020 markets have gotten off to a bumpy start, the CAAT plan has a long-term perspective. “Even though we are monitoring what’s going on in the marketplace, I …

CPPIB Gains 3.1% in Fiscal 2020

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Pete Evans of CBC News reports CPP adds $17 billion to assets now worth more than $409 billion despite the pandemic:
The Canada Pension Plan earned a return of 3.1 per cent after expenses during the financial year ended March 31, the board that manages the fund's money reported Tuesday.

Net assets for Canada's national pension plan totalled $409.6 billion as of the end of March, up from $392 billion at the end of the previous financial year.

The $17.6-billion year-over-year increase included $12.1 billion in net income from its investments. The other $5.5 billion came from contributions of more than 20 million Canadian workers covered by the plan.

In the past five years, investment returns have added $123 billion to the fund's assets, the Canada Pension Plan Investment Board said Tuesday.

While the plan made money for the year as a whole, the fourth quarter was a challenging one because of COVID-19. The fund said fixed-income assets did well as investors fled for safety, b…

US Public Pensions Less Than 60% Funded?

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Steffan Navedo-Perez of Chief Investment Officer reports that Goldman Sachs estimates public pensions are now less than 60% funded on average: Average funding ratios for public pension funds have declined to 60% and below, down from 74% before the crisis, according to Goldman Sachs Senior Pension Strategist Michael Moran.

In an interview with Yahoo Finance, Moran discussed the most prominent issue pension funds will face: hitting their return targets. Usually set at about 7%, today’s extremely low interest rates will make that all the more difficult to attain in the future.

“What potentially changes [with public pension funds] is how they think about asset allocation and liquidity going forward,” Moran said. “Many of these plans have a 6.5% to 7% nominal return target, and I think many of them are questioning, ‘How do I hit that target in an environment where 30-year Treasury bond yields are below 1.5%.’”

“It just becomes more challenging and I think they’ll have to become more nimble, …

Top Funds' Activity in Q1 2020

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Jason Orestes of The Street reports Amazon is clearly what hedge funds are betting on these days:
Amazon has been a major beneficiary of the Covid-19 chaos, and hedge funds have taken notice.

The fastest bear market in history saw a 30% plummet followed by a rapid 30% rebound. But there has been a large bifurcation in this rally. While many stocks remain significantly depressed on the year, tech has flourished. The Nasdaq is actually up year to date, and megacap tech, buoyed by stay-at-home orders and an inexorable trend of work-from-home (WFH) policy becoming the norm, has reaped much of these gains.

Amazon’s 32% return has outpaced all FAANG + Microsoft names save Netflix (39%), but more importantly, Amazon has transmuted its tech designation to that of the ultimate “essential” business. The coronavirus pandemic has exposed the fragility of many business models, but it’s managed to do the opposite for Amazon. When something is fragile, it suffers or breaks under stress or change; wh…