Ontario Teachers’ net assets top $200 billion in first half of 2019
Net assets increase by $10.3 billion from Dec. 31, 2018 to $201.4 billion
TORONTO — Ontario Teachers’ Pension Plan (Ontario Teachers’) today announced its net assets reached $201.4 billion as of June 30, 2019, a $10.3 billion increase from December 31, 2018. The total-fund net return was 6.3% for the first six months of the year.
“Our focus is on achieving stable results that help deliver financial security to our members through a variety of market conditions,” said Ron Mock, President and Chief Executive Officer. “Our balanced portfolio approach is delivering strong returns that are in line with our long-term objectives.”
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, 2018, the last date for which there are full year figures, the Plan has had an annualized total fund net return of 9.7% since inception. The five- and ten-year net returns, also as at December 31, 2018, were 8.0% and 10.1%, respectively.
“In the first half of the year, we had positive performance across every asset class in our portfolio, led by fixed income” said Ziad Hindo, Chief Investment Officer. “Over the last few years, we have been transitioning the asset mix to a more balanced approach from a risk perspective and as part of this transition, we increased our allocation to the fixed income asset class.”
The nature of Ontario Teachers’ business involves planning for the future. We take the long view on how we invest, what we invest in, and the integration of responsible investing practices into our investment decisions. Core to these plans is a larger focus on being global when it comes to the investments we make and the talent we hire.
“We demonstrated our focus on expanding globally in the first half of the year with the announcement of Jo Taylor, who has 35 years of experience investing around the world, as our next CEO, and the launch of our global Teachers’ Innovation Platform, which will pursue growth equity and late-stage venture capital investments in disruptive technology,” added Mock. “We are also very proud of the continued advancements we have made in attracting top talent and deploying technology to enhance our decision making and service model.”
Detailed Asset Mix
As at June 30, 2019 As at December 31, 2018
| Effective Net Investments at Fair Value ($ millions) | Asset Mix % | Effective Net Investments at Fair Value ($ millions) | Asset Mix % | |
|---|---|---|---|---|
| Equity | ||||
| Publicly traded | 33,498 | 17 | 31,602 | 17 |
| Non-publicly traded | 34,302 | 17 | 33,354 | 18 |
| 67,800 | 34 | 64,956 | 35 | |
| Fixed income | ||||
| Bonds | 71,936 | 36 | 58,243 | 31 |
| Real-rate products | 20,885 | 11 | 19,473 | 10 |
| 92,821 | 47 | 77,716 | 41 | |
| Inflation sensitive | ||||
| Commodities | 14,303 | 7 | 10,612 | 6 |
| Natural resources | 8,138 | 4 | 8,117 | 4 |
| Inflation hedge | 9,025 | 5 | 8,709 | 5 |
| 31,466 | 16 | 27,438 | 15 | |
| Real assets | ||||
| Real estate | 27,228 | 14 | 27,444 | 15 |
| Infrastructure | 17,141 | 9 | 17,801 | 9 |
| Real-rate products | — | — | 4,332 | 2 |
| 44,369 | 23 | 49,577 | 26 | |
| Credit | 16,242 | 8 | 15,232 | 8 |
| Absolute return strategies | 14,623 | 7 | 12,547 | 7 |
| Overlay | 569 | — | (375) | — |
| Money market | (69,423) | (35) | (59,509) | (32) |
| Net investments1 | $198,467 | 100% | $187,582 | 100% |
1 Net Investments, which comprise investments less investment-related liabilities per the June 30, 2019 Condensed Interim Consolidated Statement of Financial Position, are $2,895 million lower than Net assets which include all other assets and liabilities.
Total fund local return was 7.8%.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 2019, currency had a negative 1.3% impact on the total fund, resulting in a loss of $2.5 billion that was mainly driven by the appreciation of the Canadian dollar relative to various global currencies including the US dollar, Euro and British Pound.
About Ontario Teachers’
The Ontario Teachers' Pension Plan (Ontario Teachers') is Canada's largest single-profession pension plan, with $201.4 billion in net assets at June 30, 2019. It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.7% since the plan's founding in 1990 (all figures as at Dec. 31, 2018 unless noted). 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 327,000 active and retired teachers. For more information, visit otpp.com and follow us on Twitter @OtppInfo.
Contact:
Dan Madge
Ontario Teachers' Pension Plan
Phone: +1 416-730-6451
Email: Dan_madge@otpp.com
Anelia Fikiina
Kekst CNC
Phone: +44 203 7551 629
Email: otpp@kekstcnc.com