3 Ways Canadian Pension Fund Portfolios Are Changing

This year’s International Best Practices Forum gathered DB pension decision makers from across Canada as well as representatives from the pension space around the world. Chief among the many topics that arose again and again was the uncertainty bred by today’s macroeconomic and geopolitical challenges. Throughout the event we were able to gauge the impact of today’s conditions on investment decision making among our delegates – and the results were often surprising. In particular, we saw three key trends emerging: 

1 – Pension plans are turning away from public markets – As part of our Future of Public Markets panel discussion, we asked delegates to tell us whether or not they plan to allocate more money to public markets over the next five years. A surprising 70% of our delegates said no, leaving just 30% of asset owners in the room planning on upping their exposure to public equities. 

2 – Africa is coming to a pension portfolio near you – During a session on pension funds and infrastructure in Kenya, we polled our audience on whether they plan to have an allocation to Africa in the next five years. While 54% said no, a surprising 46% now say they will add exposure to Africa in the near- to medium-term. 

3 – The long-term assumptions are changing – One thing is becoming increasingly clear – the new macroeconomic and geopolitical era we’re living in will have a lasting impact on pension plans in Canada. During our CIO panel, we asked delegates to tell us whether today’s market and economic challenges will cause them to change their long-term assumptions for their portfolio’s expected return. A majority – 72% – responded yes.

See the full results below. 

Do you expect to allocate more to public markets in the next five years? 

Given today’s market and economic challenges, have you or do you expect to change the long-term assumptions for your portfolio’s expected return?

Do you expect to have an allocation to Africa in the next 5 years?