Quebec’s pension fund manager reports loss of 5.6 per cent in 2022

The Quebec Depository Corporation (CDPQ) reported a loss of 5.6% in 2022. This year was the year when both the stock and bond markets fell at the same time.

Net worth fell $18 billion to $402 billion as of Dec. 31, according to results released Thursday.

President and CEO Charles Emond emphasized that the first six months of this year have been marked by the worst simultaneous stock and bond market corrections in 50 years.

“In the face of this extraordinary situation, all asset categories managed to outperform the index even though investors had littlewhere to hide.”

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Bonds traditionally offer some protection against equity market corrections in diversified portfolios, but the scale of last year’s rate hikes has pushed bond markets down.

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Caisse points out that the 5.6% loss is better than the benchmark portfolio’s 8.3% decline.

Over five years, Caisse’s annualized return was 5.8%. The 10-year annual return was 8%.

In 2022, Caisse will make $4 billion in new investments in Quebec. Quebec’s total assets reached $78.4 billion. Last December, Emond announced a new goal for his Quebec wealth to reach his $100 billion by 2026.

Total internal and external investment management costs as of December 31 decreased to 48 cents per $100 of average net worth, or 0.48%, down from 0.57%.

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Emond predicted that the environment would be difficult for the stock market, and that interest rates would need to rise a little more to curb stubborn inflation, and an economic slowdown would occur.

“We said 2022 would be historically tough. 2023 won’t be much different.”

Senior vice president and head of liquid markets Vincent DeLisle said investors were holding out hope that the central bank would temper their enthusiasm. He said the market was not ready to swallow the powerful medicine provided by the central bank and there was a risk that the market would be a bit disappointed.

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Emond also said that Caisse gave up on cryptocurrencies after having a bad luck with the Celsius network. Investments in 2021 crypto interest and loan platforms have evaporated in less than a year, swallowing $200 million.

“I will never do that again.

He added that Caisse has filed a legal complaint against the platform for “false and misleading information” about its financial situation.

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© 2023 The Canadian Press

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