In 1990, Canadian pension funds allocated close to 80%* of their equity investments to Canadian public equities. By 2020, this had fallen to barely 10%*. This decline has important policy implications for Canada. Who will determine Canada’s future if Canadian savings do not play their essential economic role in funding Canadian investments? What will be the impact on growth, jobs, and incomes? This is only one of several issues that have risen in importance as a result of the shortening of the investment horizon that has been imposed on pension funds by changes to regulations.
With favourable demographics; a tolerant, well-educated and diverse population; an expanding economy with moderate debt levels;
abundant natural resources; modern infrastructure; world renowned educational institutions, we are bullish on Canada.
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Well-educated population
Expanding economy
Strong Diversified Stable Economy
Reasonable Debt Levels
Sound Banking System
Since inception of the firm in 1988, our Canadian portfolios have generated $18 billion in net gains[1] by investing in Canadian equities, equivalent to a 14.8 per cent compounded annualized return. This is almost double the 7.8 per cent annualized return delivered by international markets[2] over the same period.
Compounded Annualized Returns as at December 31, 2021
1 yr | 3 yrs | 5 yrs | 10 yrs | Since Inception | |
---|---|---|---|---|---|
Gross Return | 37.4 | 15.1 | 8.8 | 12.0 | 14.8 |
Benchmark return | 25.1 | 17.6 | 10.0 | 9.1 | 8.7 |
The Pension Investment Association of Canada reported that in 2000, the annual weight of Canadian equities in overall asset allocation of pension plans in Canada was 28 per cent; in 2020, it was approximately 5 per cent.
There are self-sustaining benefits to investing in our own industries
We should be laser-focused on building the next made-in-Canada global success story. If Canadian pension funds and institutional investors don’t invest in our own country to support the development of these businesses, who will?
There are self-sustaining benefits to investing in our own industries
We should be laser-focused on building the next made-in-Canada global success story. If Canadian pension funds and institutional investors don’t invest in our own country to support the development of these businesses, who will?
To learn more about our investing philosophy, send us a note, or see what we are saying in the media.
Eastern Canada
Joé Marcone
514-315-8126
[email protected]
Central Canada
Jack Bruton
647-426-1987 ext 215
[email protected]
Western Canada
Paul Vaillancourt
587-350-1706
[email protected]
Canadian Pension System’s Divestment of Canadian Equities. This situation has many implications for economic growth and should be a major policy concern for Canadians and our government.
LetkoBrosseau, a leading Canadian investment manager, today announces its concerns about the significant reduction of investment in Canadian publicly traded equities by the country’s pension fund industry […]
“La Caisse de dépôt est la caisse de retraite canadienne qui maintient un pourcentage d’actions canadiennes parmi les plus élevés au Canada, avec près de 20 % d’actions canadiennes dans son vaste portefeuille de 191 milliards. Chez LetkoBrosseau, le pourcentage d’actions canadiennes atteint 40 %.”
“While we understand the need for international diversification, a principle we have followed for many years, balance is required. That said, the strength of the Canadian economy and self-sustaining benefits of investing in our own industries should be an equally important priority.” – Peter Letko, Senior Vice President at LetkoBrosseau, comments on the firm’s recent press release in this BNN interview.
Private pension funds should invest more in Canadian businesses
“Research conducted by the Montreal-based global investment management firm Letko-Brosseau recently revealed that Canadian-listed equities accounted for nearly 80% of Canadian pension fund equity investments in 1990. By 2020, this proportion had fallen to only 10%.”
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