Using Benchmarks to Ensure Our Effectiveness

At Ontario Teachers', 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- 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
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 our various asset groups are shown in the table below.

Benchmarks Used to Measure Fund Performance

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
  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

1 The Innovation asset class is new in 2020. The asset class benchmark is set to equal actual results during the initial 3-to-5 year incubation period

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 view certain expenditures as necessary to achieve long-term performance requirements.

In 2019, total investment administrative expenses were $615 million or 31 cents per $100 of average net assets, compared to $555 million or 30 cents per $100 in 2018.

The total-fund net return is after deducting transaction costs, management fees, and investment administrative expenses, and is reported in Canadian dollars.