Canada's largest pension plan is nearly half of all assets invested in the U.S., and despite pressure from government officials to invest in their own markets, its exposure has increased significantly.
The Canada Pension Plan Investment Board, which manages 71.4 billion Canadians ($5.16 billion) of pension assets, said Wednesday that 47% of its portfolio invested in the U.S. at the end of March.
That's an increase from 42% in 2024, when Canadian executives launched a large pension plan that forced the country to invest more domestic assets, compared with only 36% in 2023.
Canada should be the 51st state of the U.S. due to tensions between Washington and Ottawa this year on tariffs and President Donald Trump’s recommendations, which have surged due to a surge in tensions between Washington and Ottawa.
CPPIB underperformed, with its benchmark returning 9.3% in the year to March, and its assets invested higher in the U.S., partly because U.S. investment performed better than its competitors.
CPPIB said that over the past five years, the U.S. returns have provided a net return of 9.6%, while Canadian shares have a net return of 5.8%.
"We are proud to be Canadians and are convinced that this country is one of the best places to invest in the world," said CEO John Graham.
He added that since the end of the fiscal year in March, inflation remains worrying as “expectations of growth in threatened and implemented tariffs have decreased, with markets always concerned that markets are priced higher”.
Three years ago, the allocation of Canadian assets fell to 12% of the fund from 14% three years ago, although the total value of Canadian assets is still increasing.
In March 2024, more than 90 Canadian company executives signed an open letter calling on the government to amend the country’s pension funds regulations and allow them to increase their domestic investments - claiming that the amount they allocated to Canadian stocks has dropped from 2000% to 28% in 2023.
CPPIB says its distribution of private equity, which accounts for 23% of the core portfolio, has performed the most in the past five years.
The fund's total private equity fell to $146 billion from S$156 million in the previous year. Its investments cover a range of areas of partnership with companies such as Silver Lake, Carlyle and Blackstone.
Last year, the fund changed its leadership structure as part of a “strategic evolution”, appointing longtime employee Caitlin Gubbels as global head of private equity.