‘Discipline is in order’: Caisse de dépôt braces for volatility after posting 4.2% return in first half
The Caisse de dépôt et placement du Québec posted a 4.2 per cent return on its investments for the first half of this year, driven mainly by good performance in tech stocks and solid returns from its infrastructure portfolio, but coming in below its overall benchmark.
“The first half of the year was characterized by different factors: strong stock market performance that continued to be linked to a historic level of concentration in a handful of tech stocks, the U.S. Federal Reserve’s deferral of many rate cuts that were anticipated at the beginning of the year and modest global economic growth,” said chief executive Charles Emond, in a news release. “Discipline is in order going forward, as the second half of the year has already seen its share of twists and volatility.”
Investment returns fell short of the fund’s benchmark of 4.6 per cent in the first half. Over a five year period, the fund’s annualized average return of six per cent still tops the benchmark portfolio’s return of 5.3 per cent.
The Caisse’s net assets totalled $452 billion as of June 30, 2024, up from $424 billion the same time last year.
The returns were driven mainly by strength in its equity and private equity portfolios.
The equities portfolio posted a 13.6 per cent return over the six month period, above the benchmark equity index’s return of 13.2 per cent. The performance was driven by a sharp rise in major U.S. stocks. In private equity, the portfolio earned a return of 6.9 per cent.
“The numbers speak for themselves,” said Vincent Delisle, senior vice-president at the Caisse, during a press conference in Montreal, calling the S&P 500‘s gains since the beginning of the year, which peaked at close to 20 per cent in July, “quite astonishing.”
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