(Bloomberg) -- Ontario Teachers’ Pension Plan said equity gains helped offset fixed income and currency losses in the first half of the year, giving the Toronto-based retirement fund manager a 3.8% return for the period.
“We saw strong performance in our private and public equity, innovation and inflation-sensitive asset classes,” Chief Investment Officer Ziad Hindo said Monday in a statement. “Gains were partially offset by losses in fixed income and currency.”
The fund manager, which has C$228 billion ($179 billion) in assets, trimmed exposure to debt last year by cutting back on sovereign markets with negative interest rates and reducing exposure to markets such as the U.S., which has seen a significant economic impact from Covid-19. Fixed income accounted for 20% of the portfolio in the first half, up from 16% at the end of December, with bonds representing 15%.
The fund had a 9.3% increase in real estate and infrastructure assets from the end of last year, with the C$47 billion in investments accounting for about one-fifth of the portfolio. Inflation sensitive assets accounted for 21% of the portfolio, up from 17% at the end of December, while assets under its innovation portfolio jumped 63% to C$5.66 billion. Ontario Teachers’ doesn’t break down gains for its various assets classes in its mid-year results.
Ontario Teachers’ added to its infrastructure bets this year, buying stakes in the operator of thermal energy systems Enwave Energy Corporation in Canada, electricity transmission platform Evoltz Participacoes SA in Brazil and electricity distribution system operator Caruna Networks Oy in Finland.
The pension fund holds investments in over two dozen currencies across more than 50 countries, but reports results in Canadian dollars. The stronger Canadian dollar had a negative 1.5% impact on the total fund in the first half, resulting in a loss of C$3.2 billion.
Its annualized net return since its inception in 1990 is 9.6% and the 10-year return was 9.3%, the fund said.
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