Ontario Teachers’ Pension Plan returns 6.3% in H1

This article originally ran on our sister site, Benefits Canada.

The Ontario Teachers’ Pension Plan increased its net assets by $10.3 billion in the first half of the year, reaching a total of $201.4 billion as of June 30, 2019, and achieving a return of 6.3 per cent.

“We’re pleased to report that our results at mid-year are strong,” said Ron Mock, president and chief executive officer, during a conference call on Wednesday.

Most asset classes grew, with real estate the one exception. It shrank from 15 per cent to 14 per cent of the total portfolio and ticked down in dollar terms from $27.44 billion to less than $27.23 billion.

Fixed income saw the biggest shift, moving from 31 per cent to 36 per cent of the total portfolio, rising from $58.24 billion in assets to just under $71.94 billion. Ziad Hindo, chief investment officer, noted on the call that the shift to more fixed income was part of an initiative to balance the portfolio’s risk to fortify further sustainability. The asset class has posted the strongest returns of any asset class for the year so far, he added.

“We’re really focused on building a diversified portfolio that is balanced from a risk perspective,” said Hindo.

Solid equity returns were offset partially by the strong Canadian dollar, he added. Currency fluctuations ultimately had a negative 1.3 per cent impact on returns, with the loonie’s strength the main driver.

Going forward, added Hindo, the Ontario Teachers’ is focused on continuing to hire global talent to buy, source and manage assets across the globe to further increase its geographic diversification.