We measure our investment performance on an actual basis and against a range of benchmarks. Benchmarking allows board members, plan members and employees to evaluate the effectiveness of our investment strategies and activities relative to the risks taken.
On a total-fund basis and for each asset group, we work to surpass the relevant benchmarks and when we do, we describe that as "value-added" performance.
As long-term investors, the most relevant measure of our performance is over several years. So, in addition to providing one-year returns, we also track four-, five- and 10-year net returns along with net returns since 1990 – when we began our investment program – all on an actual basis and against the benchmark
Investment performance
| 2020 | 2019 | 4-year | 5-year | 10-year | Since Inception |
|
|---|---|---|---|---|---|---|
| Total-fund net return | 8.6 | 10.4 | 7.8 | 7.0 | 9.3 | 9.6 |
| Benchmark return | 10.7 | 12.2 | 7.9 | 7.0 | 8.5 | 7.9 |
| Return above benchmark | (2.1) | (1.8) | (0.1) | 0.0 | 0.8 | 1.7 |
Benchmarks for asset groups
| Investment Asset Class |
Composite Benchmark - 2020 | |
|---|---|---|
| Equity | S&P/TSX 60 | |
| S&P 500 | ||
| MSCI All Country World ex Canada ex Tobacco | ||
| MSCI China | ||
| MSCI Europe | ||
| MSCI Japan | ||
| MSCI China A Onshore | ||
| Custom Global Private Capital | ||
| Custom Global Long Term Equity | ||
| Custom Global Equity Benchmark | ||
| Fixed Income | Custom Canada Long Bond Universe | |
| Custom Provincial Long Bond | ||
| Custom U.S. Treasury Index | ||
| Custom Canada Real Return Bond | ||
| Custom Money Market Benchmark | ||
| Custom Global Fixed Income Benchmark | ||
| Credit | Markit iBoxx USD Liquid Investment Grade Index | |
| Markit iBoxx USD Liquid High Yield Index | ||
| Markit iBoxx USD Liquid Leveraged Loans Index | ||
| Custom Emerging Markets Local Currency Sovereign Debt Benchmark | ||
| Custom Credit Benchmark | ||
| Real Assets | 5.0% + IPD Canada Capital Growth (Real Estate excluding Brazil) | |
| Custom Real Estate Debt Benchmark | ||
| Local CPI plus 4% plus country risk premium (Real Estate Brazil) |
||
| Local CPI plus 3% plus country risk premium (Infrastructure) |
||
| Custom Real Assets Benchmark | ||
| Inflation Sensitive | Goldman Sachs Commodities Index | |
| Goldman Sachs Commodities Index 3 Month Forward | ||
| NCREIF Timberland Index (U.S. Timber) | ||
| Local CPI plus 4% plus country risk premium (Natural Resources and Non-U.S. Timber) | ||
| Custom Gold Benchmark | ||
| Custom Commodities Benchmark | ||
| Custom Inflation Sensitive Benchmark | ||
| Innovation | Custom Innovation Benchmark¹ | |
| Absolute Return Strategy, Money Market, Overlay | Custom Canadian CDOR Index | |
| Custom U.S. LIBOR Index | ||
| Custom Equity Hedge | ||
| Custom Currency Overlay | ||
| Custom Funding Benchmark | ||
Investment costs
Managing a successful investment program involves costs in areas such as salaries and benefits, fees and commissions and research. We are committed to cost effectiveness and believe costs should be managed and linked to the investment value creation process. The board and management employ various tools to ensure that costs are appropriate and well managed.
The total-fund net return is after deducting transaction costs, management fees, and investment administrative expenses, and is reported in Canadian dollars. In 2020, total investment costs were 70 cents per $100 of average net assets, compared with 76 cents per $100 in 2019.