Investment

Victoria-based company nets record return for BC pension investment in pandemic year – Vancouver Island Free Daily – vancouverislandfreedaily.com

Published

3 years ago

July 27, 2021

The Victoria-based company responsible for B.C.’s public-sector pensions saw its funds grow by 16.5 per cent during fiscal 2021 – one of the most positive pandemic-year returns for a provincial pension management company in Canada.

British Columbia Investment Management Corporation (BCI) increased its assets under management by $28.3 billion to $199.6 billion. The assets contribute three-quarters of every $100 spent on retirement benefits to the 690,000 pension-collecting retirees of B.C.’s public sector.

By comparison, the Investment Management Corporation of Ontario and Alberta Investment Management Corporation saw increases of 5.4 per cent and 2.5 per cent, respectively, during fiscal 2020 according their annual reports.

The B.C. Investment Management Corporation has a prominent home in downtown Victoria across from city hall. (Kiernan Green/News Staff)

February and March 2020 – the early months of the pandemic – showed a worse national market downturn than that seen during the 2008-10 global recession, with over one million jobs lost in a one-month period, according to Statistics Canada.

Despite that performance, investment and management decisions committed at BCI in the last six years resulted in even higher returns done 2021 than the company achieved in 2015 (14.2 per cent) – along with the full funding of clients’ pensions throughout the pandemic.

The timing of some of those decisions, CEO Gordon Fyfe told Black Press Media, was nothing short of fate.

Victoria native Fyfe was appointed to manage BCI in 2014 and within months of his arrival, the board of directors greenlit a new strategy for managing their clients’ pensions. It drew on the federal government’s Public Sector Pension Investment Board, for which Fyfe was CEO for 11 years in Montreal.

The strategy, Fyfe said, began with expanding the company’s international portfolio. BCI’s investments in U.S. assets increased by 14.7 per cent since 2015, according to their annual reports.

“We’ve reduced our weighting in offices and our weighting in shopping centres (infrastructure investments), and we’ve increased significantly our weighting in things like warehouses,” he said. “So Amazon is a big partner of ours.”

According to StatsCan, online shopping, and thus, the use of warehouse distribution centres, has increased 94.8 per cent throughout the pandemic.

In 2015, Canadian investments made up over half of BCI’s portfolio.

“They’d done really well, but it was overweighted compared to the role of Canada’s economy in the world,” Fyfe said, noting that Canada comprises just 1.4 per cent of the world’s gross domestic product. Today, BCI’s Canadian investments account for just over a third of global assets, but remain their largest investment region.

There was also the fateful decision to sell several airport and hotel investments in 2016, including the Delta Hotel brand name, which would go on to plummet in value with the onset of pandemic travel restrictions.

“In many cases, it’s not about what we owned but what we didn’t own,” Fyfe said with regard to their successful pandemic-year return.

The hiring of in-house asset management was the second half of BCI’s strategy half a decade in the making. Before 2016, nearly all of that work was given to outside financiers, Fyfe noted. Since then, he said, a team of newly hired asset managers has freed up $3 billion in fees back into investments and the payrolls of around 400 new hires.

“It certainly helps the economy. We now have 600 people managing $200 billion based here in Victoria. Rather than everybody around the world taking that money from our pensioners, that money’s staying here in the province.”

Evoking the words of Bank of Canada governor Tiff Macklem, Fyfe said it’s easier to shut down an economy than it is to start it up again.

“That’s exactly what’s happened,” he said. As the country begins its pandemic recovery and typical spending resumes, BCI intends to monitor the inflation of its investments.

“Large parts of our portfolio are sensitive to inflation and they’ll do fine with an inflationary environment,” Fyfe said.

Do you have a story tip? Email: kiernan.green@blackpress.ca.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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