CPPIB ekes out 1.1 per cent return on investments in Q3 despite December downturn

BUSINESS

CPPIB ekes out 1.1 per cent return on investments in Q3 despite December downturn

The Canadian Press Published Thursday, February 14, 2019 11:12AM EST

Canada Pension Plan Investment Board president and chief executive officer Mark Machin waits to appear at the Standing Committee on Finance on Parliament Hill, in Ottawa on Nov. 1, 2016. (File/THE CANADIAN PRESS)

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TORONTO -- Canada Pension Plan Investment Board says it was able to overcome a general downturn on stock markets near the end of 2018 to record a 1.1 per cent return in its third quarter.

The investment manager for the Canada Pension Plan said its CPP Fund had $368.5 billion of assets at Dec. 31 -- up $200 million from the quarter ended Sept. 30.

The increase was after $3.8 billion in net cash outflows to the CPP during the quarter, which offset most of the $4 billion of net income achieved by CPPIB through its investment activities.

Chief executive Mark Machin says that broad declines in global stock markets created a challenging investment environment during the quarter, especially in December

But Machin added that CPPIB benefited from its diversified investment portfolio and the positive impact of a decline in the Canadian dollar compared with other major currencies, which increased the relative value of its foreign investments.

CPPIB's annualized net real rate of return over 10 years -- which adjusts for inflation -- was 8.2 per cent.