Ontario Teachers# net assets reach $193.9 billion in first half of 2018

Stocks and Financial Services Press Releases Thursday August 23, 2018 13:59
TORONTO--23 Aug--PRNewswire/InfoQuest
  • Net assets increase by $4.4 billion

Ontario Teachers' Pension Plan (Ontario Teachers') today announced its net assets reached $193.9 billion as of June 30, 2018, a $4.4 billion increase from December 31, 2017. The total-fund net return was 3.2% for the first six months of the year.

"At Ontario Teachers' we define success by our ability to pay pensions for generations to come, and we are continuously advancing and innovating on that mission," said Ron Mock, President and Chief Executive Officer. "Even in these uncertain markets, our balanced portfolio approach is delivering solid returns, and our investment teams continue to find opportunities for long-term growth."

Mid-year results provide a snapshot of the Plan performance over a six-month period, while historical returns underscore the long-term sustainability of our investment strategy. As at December 31, 2017, the last date for which there are full year figures, the Plan has had an annualized total fund net return of 9.9% since inception. The five- and ten-year net returns, also as at December 31, 2017 were 9.6% and 7.6% respectively.

Ontario Teachers' takes a long-term, disciplined approach to managing the portfolio through a variety of different market conditions. A forward-looking and inclusive focus across the organization helps ensure a diverse allocation of risk with appropriate and aligned interest rate, inflation, foreign exchange and equity exposures.

While financial markets have stabilized, volatility will likely continue amid global trade tensions, rising energy prices and geopolitical tensions.

"Returns in the first half were driven mainly by the performance of the equity asset classes, both public and private, and the inflation sensitive asset class," said Ziad Hindo, Chief Investment Officer. "The benefits of diversification and globalization are clear as different asset classes perform differently based on shifting markets."

Detailed Asset Mix
As at June 30, 2018                           As at December 31, 2017
(Canadian                         (percent)   (Canadian                       (percent)
$ billions)                                   $ billions)
Equity
Publicly traded             35.1             18                       35.2             19
Non-publicly traded         32.1             17                       31.9             17
67.2                               67.1
Fixed income
Bonds                       46.8             24                       41.4             22
Real-rate products           20.4             11                       20.0             11
67.2                               61.4
Inflation sensitive
Commodities                 13.5             7                         11.1             6
Natural resources           7.3               4                         6.6               3
Inflation hedge             9.2               5                         8.9               5
30.0                               26.6
Real assets
Real estate                 26.7             14                       25.5             14
Infrastructure               17.2             9                         18.7             10
Real-rate products           4.2               2                         1.5               1
48.1                               45.7
Credit                             14.4                                 7     13.6               7
Absolute return strategies         13.5                                 7     10.7               6
Overlay                           (0.4)                               —     (0.3)             —
Money market                       (48.7)                               (25)   (39.4)             (21)
Net investments1                   $           191.3                     100%   $           185.4   100%
1 Net Investments, which comprise investments less investment-related liabilities per the June 30, 2018 Condensed Interim Consolidated Statement of Financial Position, exclude all other assets and liabilities.

Total fund local return was 2.6%.The Plan invests in 35 global currencies and in more than 50 countries, but reports its assets and liabilities in Canadian dollars. In the first half of 2018, currency had a positive, +0.7% impact on the total fund, resulting in a gain of $1.4 billion that was mainly driven by the appreciation of the U.S. dollar.

About Ontario Teachers'

The Ontario Teachers' Pension Plan (Ontario Teachers') is Canada's largest single-profession pension plan, with $193.9 billion in net assets at June 30, 2018. It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an average annualized rate of return of 9.9% since the plan's founding in 1990. Ontario Teachers' is an independent organization headquartered in Toronto. Its Asia-Pacific region office is located in Hong Kong and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded, invests and administers the pensions of the province of Ontario's 323,000 active and retired teachers. For more information, visit https://www.otpp.com/ and follow us on Twitter @OtppInfo.

Note to Editors: Please See Attachments:
  • Mid-Year Report 2018
  • June 30, 2018 Financial Statements
For further information - Pav Jordan, Investment Communications, +1 (416) 228-6862, pav_jordan@otpp.com
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