Ontario Teachers' pension posts better returns, but says wins are getting harder to come by

financialpost.com:

The Ontario Teachers’ Pension Plan says it had a better first half of 2024 after ending 2023 on a disappointing note, as it generated positive returns across its portfolio.

Teachers’ said it had a six-month return of 4.2 per cent, or $10.8 billion, as of June 30, and had $255.8 billion in assets, up $8.3 billion since the end of 2023.

“All of our asset groups actually made a positive contribution, which wasn’t the case in 2023,” chief executive Jo Taylor said. “We are aiming for a four per cent real return and, therefore, our performance in the first half of the year is pretty consistent with that long-term objective.”

In 2023, Teachers’ posted a net return of 1.9 per cent, which was sufficient to cover net pension outflows, but Taylor said it was not satisfactory. It also had a more negative economic outlook than what ultimately transpired, so it did not benefit from the strong market performance, particularly in the United States.

Although a thorough assessment of this year’s performance can only come about by the end of 2024, Taylor said the pension plan is feeling “more positive about how returns are coming through the different parts of the investing teams.”

Teachers’ invests in more than 50 countries in a broad array of assets. But despite being in a “comfortable position” and being fully funded for the past 11 years, Taylor said it isn’t as easy to make returns in the current environment than it was in the past.

“Some of the reason for that is more volatility in the market,” he said. “It’s more complicated to be a large-scale international investor, the type we are, investing around the world with geopolitics and other issues.”

He said some of the markets where Teachers’ made good returns on a 10-to-20-year basis