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Year End Investment Report

Pension plan posts 2.33% return for 2019

The net investment return for the Queen’s Pension Plan for the 12 months ending August 31, 2019 was 2.3286%. Volatility returned to global equity markets after two relatively steady years, but thanks to strong results in the fixed income portfolio, the Fund posted a positive return for a tenth consecutive year. The S&P/TSX Composite Index was up 4.4% for the 12 months ending August 31, 2019 while the US and global equity markets also posted positive but modest returns (4.9% and 2.2% respectively); the Plan’s fixed-income holdings, meanwhile, returned 9.93%.

The Fund’s relative performance however was mostly negative with a majority of active managers underperforming against their benchmark measures: the Fund’s gross return (before fees) was 3.51% below benchmark for the plan year.

As in the past, the Fund continues its historical pattern of being invested on a relatively conservative basis, with due regard to the fact that active, long-service Plan members shoulder considerable investment risk, especially as they approach retirement. One manager mandate change of note during the plan year involved Letko Brosseau and Associates, whose mandate was amended from global balanced to Canadian equity only; in addition, the Fund continues to have a number of specialist managers:

  • Canadian equities: Burgundy Asset Management, Connor Clark & Lunn, and TD Quantitative Capital (on a passive basis);
     
  • Canadian bonds: Connor Clark & Lunn, TD Asset Management, and PIMCO;
     
  • Foreign equities: Orbis Investment Management, and State Street (on a passive basis);
     
  • A continuing investment in a pooled fixed income fund with Integrated Asset Management Corp as well with Sun Life; and
     
  • An investment in real estate and infrastructure via two funds managed by OMERS.

Assets at the end of August were approximately $2.150 billion. The return of 2.3286% will be reflected in the account balances and projected pensions of all plan members. This information is included in the individual pension statements which will be available electronically in December, while printed statements will be distributed in January 2020.