TORONTO – CPP Investments has a cautious outlook for the months ahead despite strong returns through the July-to-September period, with net assets up $22.3 billion or five per cent from the previous quarter.
The independent investment manager for the Canada Pension Plan said Monday it had $456.7 billion in assets as of Sept. 30, up from $434.4 billion at the end of June.
Most of the growth came from $21.6 billion in net income from investments. In addition, there was $700 million in net contributions from the Canada Pension Plan.
The Toronto-based fund attributed growth during the second quarter to a continued recovery of public equity markets in July and August, which affected both its publicly traded and private equity holdings. Those gains were partly offset by a retreat of public markets in September amid concerns about further COVID-19 lockdowns.
Chief executive Mark Machin said all the fund manager’s investment departments generated positive returns during the quarter but the organization remains cautious given the uncertain economic fallout of COVID-19.
“Our investment professionals continue to pursue opportunities that will bring value to the Fund over the long term,” Machin said Monday in a statement.
On a longer-term basis, after adjusting for inflation, the second quarter of fiscal 2021 had a 10-year annualized net real return of 8.8 per cent and a five-year annualized net real return of 8.0 per cent.
Canada’s chief actuary has estimated CPP Investments needs an average real rate of return of 3.95 per cent over 75 years to meet its financial obligations.
Compared with Sept. 30, 2019, the fund’s total value increased by $47.2 billion or 10.3 per cent from $409.5 billion in last year’s second quarter.
Publicly traded equities owned by CPP Investments were worth a total of $143.6 billion, representing nearly one-third of the total portfolio. Compared with CPP Investments’ second-quarter report last year, that was up about $13 billion or nine per cent.
Private equities, which aren’t traded on stock exchanges, were worth $112.2 billion, or about one-quarter of the total portfolio as of Sept. 30. That was up $13.3 billion or nearly 12 per cent year-over year.
Real assets, including real estate, infrastructure, energy and resources, and power and renewable energy, were worth a total of $98.3 billion, up $800 million or eight per cent.
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Government bonds were worth $97.4 million (up $6.7 million or nearly seven per cent) from last year’s fiscal second quarter.
This report by The Canadian Press was first published Nov. 16, 2020.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
