CPP Portfolio Earns $1.8 Billion on Rise of Stocks and Bonds

The CPP Investment Board announced today that for the three months ending September 30, 2003, assets available to the Canada Pension Plan earned $1.8 billion, producing a rate of return of 2.8 percent. For the six months ending September 30, 2003, assets available to the Canada Pension Plan earned $4.9 billion, producing a rate of return of 8.4 percent.

The total CPP portfolio, which includes contributions to the CPP net of benefits paid, grew to $64.4 billion, an increase of $2.8 billion for the quarter.

At September 30, 2003, the assets of the Canada Pension Plan consisted of $27.4 billion in equities and real estate managed by the CPP Investment Board in Toronto, and $37 billion in fixed-income securities administered by the Department of Finance in Ottawa.

The CPP Investment Board portfolio, representing approximately 43 percent of the total CPP portfolio, consisted of 89 percent public equities, 6 percent private equities, 3 percent cash and 2 percent real estate. For the three months ending September 30, 2003, these assets earned $1.4 billion for a return of 5.4 percent. For the six months ending September 30, 2003, these assets earned $3.1 billion for a return of 14.5 percent.

The fixed income securities, representing approximately 57 percent of the total CPP portfolio, consisted of $30.6 billion in federal and provincial government bonds and $6.4 billion in an interest bearing cash deposit. For the three months ending September 30, 2003, these assets earned $411 million for a return of 0.9 percent. For the six months ending September 30, 2003, fixed income securities earned $1.8 billion for a return of 4.9 percent.

"While I'm again heartened by the most recent quarterly numbers, the CPP Investment Board is not investing for quarterly results. We are investing for quarter-century results," said John MacNaughton, President and CEO, CPP Investment Board. "We are patient, long-term investors. Our strategy of steadily diversifying the fund into asset classes with higher return expectations continues."

Based on actuarial projections, CPP contributions are expected to exceed benefits until 2021, providing an 18-year period before a portion of the investment income is needed to help pay CPP benefits.

The CPP Investment Board is a Crown corporation created by an Act of Parliament in December 1997. It invests in capital markets the funds not needed by the Canada Pension Plan to pay current pensions. Cash flows are currently invested in equities and real estate to balance the cash and bonds owned by the Canada Pension Plan. By increasing the long-term value of funds, the CPP Investment Board will help the Canada Pension Plan to keep its pension promise to Canadians. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. Its fiscal year is from April 1 to March 31. For more information about the CPP Investment Board, visit www.cppib.ca.

A teleconference has been scheduled for November 6, 2003 at 11 a.m. EST to discuss these results. Journalists who wish to participate please contact Jennifer Ross at 416-868-4682 or jross@cppib.ca. The teleconference will also be webcast live at www.cppib.ca.