The Ontario Teachers’ Pension Plan published a net comeback of 2.5 % for 2018, down from 2017’s world-wide web return of 9.7 %. On the equities side, the program somewhat reduced its exposure, moving down from 19 % in 2017 to 17 % of the total asset combine for 2018. Private collateral, however, increased slightly from 17 to 18 %. The proportion of the plan’s fixed income component rose in 2018, with bonds moving from 22 to 31 per cent of the entire portfolio, while real rate products fell from 11 to 10 %.
Ziad Hindo, key investment officer at Ontario Teachers,’ noted the significant increase in fixed income kept by the plan was a protective move intended to limit the plan’s exposure to potential economic slowdowns. “When markets are turbulent, we protect our capital,” he said during the call, noting there were also increases in yields to consider the benefit of in the asset class.
Further, Hinds said the program continues to maintain enough liquidity to permit it to join investment opportunities when they show up. The report’s standout was a strong performance of the pension fund’s substitute asset classes, which resulted in positive returns throughout a challenging year, he added. Private collateral was the major outperformer, yielding 19.5 %. Real resources also performed well, with infrastructure adding an 8.8 % return and real estate 5.8 %.
Private equity and real resources are becoming significantly competitive areas, where more capital is running after fewer available opportunities, said Hindo, noting the plan is targeted on continuing to foster its global footprint to allow strong geographic diversification. 1.6 billion increase from December 31, 2017. The total-fund online comeback was 2.5% for the entire year.
Ron Mock, President and Chief Executive Officer. As at December 31, 2018, the program has had an annualized total fund net return of 9.7% since inception. The five- and ten-year net returns, as at December 31 also, 2018, were 8.0% and 10.1%, respectively. Through the calendar year the plan’s volatility was subdued in comparison to what would have been experienced by a far more traditional asset allocation.
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3.5 billion, demonstrating the value Ontario Teachers’ people realize with active management. Ziad Hind, Chief Investment Officer. Total account local comeback was 1.3%.The Plan invests in 35 global currencies and in more than 50 countries but reports its property and liabilities in Canadian dollars. 2.8 billion that was mainly powered by the appreciation of the U.S. OTPP’s 2018 Annual Report but I also enjoyed reading the 2018 Responsible Investing Report. Take the time to read OTPP’s 2018 Annual Report, it’s truly excellent and packed with great information.
I obviously cannot cover the whole survey here but will emphasize some key sections. Ron was polite, however, and asked me to call back tomorrow if I need to protect more material, but we proceeded to go over the main element points, and I am sharing them below. First, let me start with the Report from the Chair. Maintaining a well-funded plan is an important measure of a pension’s success.
I am proud to report that as at January 1, 2019, the plan continued to be fully funded for the sixth straight for. This funding status was achieved with a nominal discount rate of 4.8%. The board is responsible for setting up the discount rate, and we feel it displays a realistic and wise view.