CPP fund closing in on $600 billion after stock market drives 3.4% gain

financialpost.com:

Roaring equity markets as 2023 drew to a close helped boost assets managed by the Canada Pension Plan Investment Board to $590.8 billion in the third quarter ended Dec. 31, up from $576.1 billion in the previous quarter.

The gain — which represented a 3.3 per cent net quarterly return for the larger base CPP account in the fund and five per cent return for the additional CPP account introduced in 2019 — was partially offset by foreign exchange losses due to a stronger Canadian dollar relative to the U.S. dollar. The blended return for the quarter was 3.4 per cent.

“Strong performance of global equity and fixed income markets during the final months of calendar 2023 contributed to the fund’s continued growth,” said John Graham, chief executive of CPPIB, which also attributed part of the quarterly growth to gains in credit, private equity, energy and infrastructure assets.

“We remain focused on applying our investment capabilities to prudently manage the fund to deliver long-term value for CPP contributors and beneficiaries,” Graham said.

The base CPP account ended the third quarter with net assets of $557.7 billion, up $11.4 billion from the end of the previous quarter. The gain consisted of $17.8 billion in net income less $6.4 billion in CPP outflows. The Canada Pension Plan Investment Board (CPP Investments) routinely receives more CPP contributions than required to pay benefits during the first part of the calendar year, partially offset by benefit payments exceeding contributions in the final months of the year. Base CPP has a five-year annualized net return of 7.7 per cent.

The additional CPP account ended the third quarter with net assets of $33.1 billion, up $3.3 billion from the end of the previous quarter. The