Performed positively in the first half of 2024, Ontario Teachers’ Pension Plan posted a return of 4.2%, or $10.8 billion. The fund counted its assets at the close of June 30 to the tune of $255.8 billion vis-à-vis $8.3 billion raised by the close of December 2023.
Chief Executive Jo Taylor mentioned that the first six months in 2024 saw all the asset groups of the fund recording positive performances, very contrary to the year before. “All of our asset groups actually made a positive contribution, which wasn’t the case in 2023,” said Taylor. “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, the pension plan fund achieved a limited net return of 1.9%, and net pension owed by the same was covered. However, Taylor did not find this performance entirely satisfactory. The more cautious economic predictions of the plan last year meant that, valued to miss higher-than-expected performance in the markets, particularly in the United States.
Realistically, more will be said of performance for the year only at the end of the year, but Taylor remained optimistic enough about the current run rate. “We are feeling more positive about how returns are coming through the different parts of the investing teams,” he said.
Global Investment Challenges
The Ontario Teachers’ Pension Plan invests in more than 50 countries across a wide variety of assets. The plan is currently in a strong position, with full funding achieved over the previous 11 years. However, Taylor said there is at least one increasing challenge under the current environment: pulling in returns. “It isn’t as easy to make returns in the current environment as it was in the past,” Taylor explained.
He credited this to the increased market volatility and the intricacies related to large scale international investments. “Some of the reason for that is more volatility in the market,” said Taylor. “It’s more complicated to be a large-scale international investor, the type we are, investing around the world with geopolitics and other issues. Taylor also pointed out that those markets which have been providing strong returns over the last 10 to 20 years, have been providing diminished returns in increasing numbers of late, accentuating the pressure on the pension plan to maintain its growth trajectory.
The leadership of the Ontario Teachers’ Pension Plan has maintained its focus on the long term and adjusted systematically to this new global investment environment.
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