How does the CPP Investment Board measure its performance against a benchmark?
We do not make direct comparisons with other pension funds. Our most relevant yardstick is our benchmark – the CPP Reference Portfolio. Introduced in fiscal 2007 and revised in fiscal 2009, the CPP Reference Portfolio represents a low-cost, low-complexity portfolio that embodies the long-term investment objectives and associated risk that was envisioned by the CPP stewards at the time of the CPP reforms in 1997. This model portfolio is approved by the board of directors for accountability and measurement purposes only and does not act as a target portfolio for the actual CPP Fund. As a long-term investor, the CPPIB believes that investment performance is best measured over rolling four-year periods. The four-year annualized investment rate of return through September 30, 2009 was 2.3 per cent representing $8.3 billion in investment income. In just over 10 years since the CPPIB began investing in April 1999, the CPPIB has generated $37.2 billion in investment income for the Fund reflect
We do not make direct comparisons with other pension funds. Our most relevant yardstick is our benchmark – the CPP Reference Portfolio. We outperformed our demanding benchmark by adding 241 basis points or approximately $2.9 billion in added value above the benchmark return of negative 3.7 per cent for fiscal 2008 (April 1, 2007 – March 31, 2008). We prefer to focus on our four-year results because our mandate is for long-term performance. Over the past four fiscal years, our annualized return has been 9.0 per cent. • Why does the CPP Investment Board use a Total Portfolio Approach instead of specific asset allocations? We focus on the efficiency of the total portfolio, not the performance of isolated asset classes or individual investment departments. We do not target specific dollar allocations for individual asset classes. Instead we allocate risk to investment strategies. Categorizing investments by risk/return attributes, rather than traditional labels, offers a better understandi
