Latest news with #pensionFunds
Bloomberg
19 hours ago
- Business
- Bloomberg
Carney Picks Canadian Pension Executive as Next Chief of Staff
Prime Minister Mark Carney is hiring an executive from one of Canada's top pension fund managers to be his chief of staff. The Caisse de dépôt et placement du Québec said in a release Sunday that Marc-André Blanchard, executive vice-president and head of CDPQ Global and and global head of sustainability, was leaving to become Carney's chief of staff.
Daily Mail
a day ago
- Business
- Daily Mail
Now Rachel Reeves is coming for your PENSION: the Chancellor wants to get her hands on up to 87% of your life savings with a vicious new tax raid - here's how to stop her: ELIZABETH ANDERSON
Have you saved wisely, invested well and built up a healthy pension to enjoy in retirement and pass down to your loved ones? Then beware. Up to 87 per cent of it could be swallowed up in tax when you die once new inheritance tax rules are introduced in 2027, Wealth & Personal Finance can reveal in our new calculations.
Globe and Mail
3 days ago
- Business
- Globe and Mail
Overstaffed, overpaid and underperforming, the CPP investment fund is in need of a sharp course correction
This time they waited until page 41 to admit it. As with most things at the Canada Pension Plan Investment Board, its annual reports have become increasingly bloated over the years. Once, the organization responsible for investing Canadians' public pension savings reported on its activities each year in a relatively straightforward fashion. The typical CPPIB annual report in those days was a relatively restrained 15,000 to 20,000 words. That was before 2006, when the CPP's surplus funds were still invested passively, that is in a way designed to track the broad market indexes. In that year, the fund switched to active management: picking individual stocks, bonds and other assets in an attempt to beat the market. Since then the fund's annual reports have become, essentially, extended advertisements for active management. They now run to more than 80,000 words: page after page of dense, jargon-filled and numbingly repetitive prose on the many arcane strategies and reams of research the fund has deployed in the quest to 'add value' – to earn a higher return, that is, than it would have had it just stuck to investing in the indexes. CPPIB CEO expects 'roller-coaster' year for investors after 9.3 per cent return in past fiscal year To be sure, the fund's managers will concede, this approach is more costly – much more costly. Where 20 years ago the CPPIB had just 150 employees and total costs of $118-million, it now has more than 2,100 employees and total expenses (not including taxes or financing costs) in excess of $6-billion. And yet, for all its eagerness to explain how it invests your money – the process – the fund is rather less keen to go into the results. This year's report is no exception. To be sure, there, in large type, is the headline figure: a rate of return of 9.3 per cent in the fiscal year ending March 31. As in previous years, the fund's managers are quick to congratulate themselves on this achievement. 'This year, we delivered solid returns for the Fund,' writes the fund's president, John Graham, crediting 'the disciplined execution of a forward-thinking strategy, by a high-performing team.' Now, 9.3 per cent certainly sounds impressive, unless you recall that equity markets generally were up wildly last year. The U.S. market returned more than 30 per cent in calendar 2024; Canada's, more than 20 per cent; other developed countries, an average of 12 per cent. Bonds earned much less, of course, but with any reasonable mix of stocks and bonds it would have been like falling off a log to earn 9.3 per cent. In fact, the CPP's traditional benchmark portfolio, a mix of 85 per cent stocks and 15 per cent bonds, earned 13.4 per cent last year – half again as much as the fund's team of disciplined, forward-thinking high-performers were able to generate. That's what you'd get just by buying the averages, or – what is the same thing – if you'd just picked stocks at random. That, however, is not the point. Any one year you could put down to bad luck. But the CPP fund didn't just underperform the indexes last year. It has done so, on average, ever since it switched to active management. That's the admission you find buried on page 41 (it was on page 39 last year): since fiscal 2007, 'the Fund generated an annualized value added of negative 0.2 per cent.' Compound that 0.2 per cent annual shortfall over 19 years, and it adds up to more than $70-billion in forgone income, on assets that now total $714-billion. The fund's managers have spent nearly two decades and a total of $53-billion trying to beat the market, only to produce a fund that is nearly 10-per-cent smaller than it would be had they just heaved darts at the listings. That's not a comment on the skills of its employees. It's a comment on the strategy. The best managers in the world regularly underperform the market, especially after costs are taken into account – two thirds in any given year, nearly all of them over longer time frames. It's one of the most well-studied phenomena in the literature. Which is why many large pension funds have given up trying, switching from active to passive management. Still, if the fund's managers can't be blamed for this performance, neither should they be rewarded for it. Which is the other scandal here: notwithstanding the fund's indifferent returns, everyone there is making out like bandits – not just in the executive suite, whose five highest-paid inhabitants earned nearly $5-million apiece on average in salaries and benefits last year, but across the organization, whose 2,100-plus employees were compensated to the tune of more than $500,000 on average. CPP Investments is an organization that is literally out of control. It is long past time it was reined in and given new directions.
CNA
5 days ago
- Business
- CNA
Super-long JGB yields extend climb from multi-week lows after weak auction
TOKYO :Long-dated Japanese government bond yields rose further from three-week lows on Wednesday, after demand at a closely watched 40-year bond auction dropped to its lowest level since July. The 40-year JGB yield jumped 9 basis points (bps) to 3.375 per cent, as of 0514 GMT, rebounding sharply from 3.285 per cent on Tuesday, its lowest point since May 7. The 30-year JGB yield advanced 10 bps to 2.93 per cent, from 2.83 per cent on Tuesday, which was the lowest level since May 2. The 20-year yield bounced 8 bps to 2.415 per cent, after tumbling to a three-week low of 2.31 per cent in the prior session. The bid-to-cover ratio, which measures total bids relative to the amount of securities offered, fell to 2.21 from 2.92 at the previous 40-year bond auction in March. The auction was closely watched for signs of a recovery in demand after an aggressive selloff last week saw super-long JGB yields spike to record highs, with support from traditional buyers of long-dated securities absent as life insurers and pension funds trim purchases this year. Analysts said the sharp drop in yields on Tuesday, after a Reuters report that the Ministry of Finance was considering cutting super-long bond issuance to ease market pressure, made the bonds overpriced, deterring buyers at the auction on Wednesday. "The soft auction result and market reaction likely fan expectations for the MOF to further tweak the sizes of super-long-end auctions," with increased issuance of 2-year or 5-year paper as a likely result, said Frances Cheung, head of FX and rates strategy at OCBC. The Bank of Japan is unlikely to alter its quantitative tightening plans to support the bond market at this stage, "but should long-end yields increase more rapidly, some shifts ... cannot be ruled out," he said. BOJ Governor Kazuo Ueda said on Wednesday that the central bank will watch whether swings in super-long yields have a knock-on effect for shorter maturities, which have a larger impact on economic activity. Japanese Finance Minister Katsunobu Kato reiterated on Wednesday that he is closely monitoring developments in the bond market, echoing similar remarks made the previous day. Last week, 30- and 40-year JGB yields hit record peaks at 3.185 per cent and 3.675 per cent, respectively, while the 20-year yield hit a multi-decade high of 2.60 per cent. Yields had been rising steadily for weeks, but selling pressure intensified abruptly amid growing concerns over debt levels in major developed economies, particularly Japan and the United States. The 10-year JGB yield gained 6.5 bps to 1.525 per cent on Wednesday, after dipping to 1.455 per cent for the first time since May 16 in the previous session. The five-year yield rose 4.5 bps to 1.045 per cent, while the two-year yield added 2 bps to 0.75 per cent. Benchmark 10-year JGB futures fell 0.66 yen to 138.79 yen.
Reuters
5 days ago
- Business
- Reuters
Demand at 40-year JGB auction sinks to lowest since July
TOKYO, May 28 (Reuters) - Demand at an auction of 40-year Japanese government bonds on Wednesday fell to the lowest since July, amid a selloff in so-called super-long debt this month. A measure of demand called the bid-to-cover ratio, which gauges total bids against the amount of securities on offer, sank to 2.2 from 2.9 at the previous sale in March. Japan's Ministry of Finance sold about 500 billion yen ($3.46 billion) of the bonds at Wednesday's auction. The 40-year JGB yield spiked to a record 3.675% last week as worries about the debt load in Japan and other developed markets like the United States led to a sell-off in the longest-dated bonds. Super-long JGBs lacked the support of traditional buyers like life insurers and pension funds, who have been scaling back purchases. ($1 = 144.5200 yen)
