Lagging behind that of its Canadian equivalent for several years, the performance of the Quebec Pension Plan (QPP) is starting to improve, but there is still a lot of work to do, admitted this Thursday the CEO of the Caisse, Charles Emond.
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In 2022, the QPP fund recorded a return of -3.9% while that of the Canada Pension Plan (CPP) amounted to -5%, said Thursday Mr. Emond during an interview with The newspaper. In 2021, the QPP posted a return of 15.9% compared to 13.2% for the CPP, according to Mr. Emond.
But over five years, the QPP is still lagging behind its Canadian counterpart: its annualized return is 6.7%, compared to 8.1% for the CPP. This gap may seem small, but it represents billions of dollars.
“I want to reverse this trend and it has been evident for two years thanks to the strategies that we take,” said Mr. Emond in an interview on Thursday. Journal.
“I come from a world, the banking world, where we compare a lot,” he noted.
More risk?
To succeed over the long term, the Fund may need to further increase its risk-taking, which has increased in recent years but remains below that of the CPP Investment Board.
The big boss of the Caisse, however, is sticking, for the moment, to “a level of risk that is similar to the market”.
In short, “a portfolio that performs in many environments, not just when it goes down, but also when it goes up,” he summed up.
For all the funds it manages, the Caisse ended 2022 with a return of -5.6%, which largely beat that of its benchmark index.
This negative return translated into a loss of $24.6 billion, which helped to reduce its net assets to $401.9 billion.
“A negative return, we never rejoice,” agreed Charles Emond at a press conference.
The return of -5.6% recorded by the Caisse is still higher than that of the “benchmark portfolio” to which it is compared, which posted a return of -8.3% in 2022.
Over five years, the Caisse’s annualized return is 5.8% (compared to 4.9% for the index) while over 10 years, it is 8.0% (7.0% for the index). ).
It was the fixed income sector (bonds and loans) that experienced the most difficulties last year, with a return of -14.9% and investment losses of $20.1 billion. The index did even worse with a return of -16.4%, according to the Caisse.
The listed equity portfolio also fared poorly with a return of -11.3% and investment losses of close to $14 billion. The Caisse narrowly beat its index, which posted a return of -11.4%.
The Caisse also outperformed the market in the private equity, real estate and infrastructure sectors.
Caisse results in 2022
- -5,6 % overall return (index: -8,3 %)
- -14,9 % fixed income (index: -16,4 %)
- +12,4 % buildings (index: 9,2 %)
- +11,5 % infrastructure (index: 0,8 %)
- -11,3 % stock market investments (index: 11,4 %)
- +2,8 % private placements (index: 0 %)
