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Ontario Teachers' net assets reach $193.9 billion in first half of 2018

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Ontario Teachers' net assets reach $193.9 billion in first half of 2018

PR Newswire

Net assets increase by $4.4 billion

TORONTO, Aug. 22, 2018 /PRNewswire/ - Ontario Teachers' Pension Plan (Ontario Teachers') today announced its net assets reached $193.9 billion as of June 30, 2018, a $4.4 billion increase from December 31, 2017.  The total-fund net return was 3.2% for the first six months of the year.

Ontario Teachers' Pension Plan (CNW Group/Ontario Teachers' Pension Plan)

"At Ontario Teachers' we define success by our ability to pay pensions for generations to come, and we are continuously advancing and innovating on that mission," said Ron Mock, President and Chief Executive Officer. "Even in these uncertain markets, our balanced portfolio approach is delivering solid returns, and our investment teams continue to find opportunities for long-term growth."

Mid-year results provide a snapshot of the Plan performance over a six-month period, while historical returns underscore the long-term sustainability of our investment strategy. As at December 31, 2017, the last date for which there are full year figures, the Plan has had an annualized total fund net return of 9.9% since inception. The five- and ten-year net returns, also as at December 31, 2017 were 9.6% and 7.6% respectively.

Ontario Teachers' takes a long-term, disciplined approach to managing the portfolio through a variety of different market conditions. A forward-looking and inclusive focus across the organization helps ensure a diverse allocation of risk with appropriate and aligned interest rate, inflation, foreign exchange and equity exposures.

While financial markets have stabilized, volatility will likely continue amid global trade tensions, rising energy prices and geopolitical tensions.

"Returns in the first half were driven mainly by the performance of the equity asset classes, both public and private, and the inflation sensitive asset class," said Ziad Hindo, Chief Investment Officer. "The benefits of diversification and globalization are clear as different asset classes perform differently based on shifting markets."

Detailed Asset Mix


As at June 30, 2018

As at December 31, 2017







(Canadian
$ billions)

(percent)

(Canadian
$ billions)

(percent)

Equity






Publicly traded

35.1

18

35.2

19


Non-publicly traded

32.1

17

31.9

17


67.2


67.1







Fixed income






Bonds

46.8

24

41.4

22


Real-rate products

20.4

11

20.0

11


67.2


61.4







Inflation sensitive






Commodities

13.5

7

11.1

6


Natural resources

7.3

4

6.6

3


Inflation hedge

9.2

5

8.9

5


30.0


26.6







Real assets






Real estate

26.7

14

25.5

14


Infrastructure

17.2

9

18.7

10


Real-rate products

4.2

2

1.5

1


48.1


45.7







Credit

14.4

7

13.6

7

Absolute return strategies

13.5

7

10.7

6

Overlay

(0.4)

(0.3)

Money market

(48.7)

(25)

(39.4)

(21)

Net investments1

$

191.3

100%

$

185.4

100%

1 Net Investments, which comprise investments less investment-related liabilities per the June 30, 2018 Condensed Interim Consolidated Statement of Financial Position, exclude all other assets and liabilities.

 

Total fund local return was 2.6%.The Plan invests in 35 global currencies and in more than 50 countries, but reports its assets and liabilities in Canadian dollars. In the first half of 2018, currency had a positive, +0.7% impact on the total fund, resulting in a gain of $1.4 billion that was mainly driven by the appreciation of the U.S. dollar. 

About Ontario Teachers'
The Ontario Teachers' Pension Plan (Ontario Teachers') is Canada's largest single-profession pension plan, with $193.9 billion in net assets at June 30, 2018. It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an average annualized rate of return of 9.9% since the plan's founding in 1990. Ontario Teachers' is an independent organization headquartered in Toronto. Its Asia-Pacific region office is located in Hong Kong and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded, invests and administers the pensions of the province of Ontario's 323,000 active and retired teachers. For more information, visit otpp.com and follow us on Twitter @OtppInfo.

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SOURCE Ontario Teachers' Pension Plan

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