Consolidated returns
We are a long-term investor. We measure our investment performance against one- and four-year benchmarks for each asset class and the portfolio as a whole within acceptable risk parameters.
We generated $4.7 billion in investment income in 2007. Net assets rose to $108.5 billion from $106.0 billion at the end of 2006. As detailed in the accompanying table, the fund returned 4.5% for 2007. That was 2.2 percentage points above the return for the composite benchmark for total value added of $2.3 billion.
Our investment managers have delivered performance greater than composite benchmark performance, not only in the past year, but also over the longer term. We have generated $12.3 billion in value added and $41.9 billion in total investment income since the beginning of 2004. This four-year measure is significant because Teachers’ incentive compensation program requires investment managers to beat the benchmark over a four-year period.
Outperforming the fund’s composite benchmark has added $25.0 billion in extra value to the fund since 1990. Real estate, currency hedging decisions by the Investment Planning Committee, Canadian equities, and infrastructure assets beat their benchmarks and contributed significant value added in 2007.
