The CPP Fund reported assets of $119.4 billion for the third quarter ended Dec. 31, 2007, compared to $121.3 billion at the end of Q2.
Investment performance was marginally negative because of challenging market conditions during the quarter. The investment rate of return was -0.14% during that time.
Consistent with the seasonal timing of cash flows to and from the CPP, the quarter also saw an outflow of $1.7 billion for CPP benefits. The CPP Fund routinely receives inflows of CPP contributions well in excess of benefits during the first part of the calendar year and returns a portion of those funds for benefits in the last calendar quarter, resulting in a net inflow each year.
“The CPP Fund’s results during the quarter reflected the markets’ volatility, and in the early part of 2008, we are seeing volatility intensify,” says David Denison, president and CEO of the CPP Investment Board. “As market participants with a very long-term investment horizon, we expect, and are prepared, to manage the fund through difficult markets like these periodically.”
For the first nine months of the fiscal year, the CPP Fund grew $2.8 billion, comprised of $2.2 billion in CPP contributions not needed to pay current pension benefits and $600 million in investment income, representing an investment rate of return of 0.54%.
For the four-year period ended Dec. 31, 2007, the CPP Fund earned $35.4 billion in investment income, representing a rolling four-year annualized investment rate of return of 10.1%.
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