All figures in Canadian dollars unless otherwise noted. First-Quarter Performance1: Net assets increase by $14.4 billion 10-year annualized net return remains strong at 9.1% TORONTO, Aug. 14, 2024 /CNW/ - Canada Pension Plan Investment Board (CPP Investments) ended its first quarter of fiscal 2025 on June 30, 2024, with net assets of $646.8 billion, compared to $632.3 billion at the end of the previous quarter. The $14.4 billion increase in net assets for the quarter consisted of $6.3 billion in net income and $8.1 billion in net transfers from the Canada Pension Plan (CPP). The Fund, which consists of the base CPP and additional CPP accounts, achieved a 10-year annualized net return of 9.1%. For the quarter, the Fund's net return was 1.0%. Since its inception in 1999, and including the first quarter of fiscal 2025, CPP Investments has contributed $438.6 billion in cumulative net income to the Fund. "Our diversified portfolio is performing as designed with gains across most asset classes," said John Graham, President and CEO. "We continue to prudently manage the Fund to deliver value to CPP contributors and beneficiaries over the very long term." The quarter's results were driven primarily by investments in public equity and across private asset classes, particularly in credit and U.S.-dollar denominated assets, which benefited from the strengthening U.S. dollar against the Canadian dollar. These gains were partially offset by investments in government bonds, which were negatively impacted as markets around the world reduced their expectations of rate cuts by central banks due to persisting inflation. Performance of the Base and Additional CPP Accounts The base CPP account ended its first quarter of fiscal 2025 on June 30, 2024, with net assets of $603.6 billion, compared to $593.8 billion at the end of the previous quarter. The $9.8 billion increase in assets consisted of $5.9 billion in net income and $3.9 billion in net transfers from the CPP. The base CPP account's net return was 1.0% for the quarter, and the five-year annualized net return was 7.8%. The additional CPP account ended its first quarter of fiscal 2025 on June 30, 2024, with net assets of $43.2 billion, compared to $38.5 billion at the end of the previous quarter. The $4.6 billion increase in assets consisted of $0.4 billion in net income and $4.2 billion in net transfers from the CPP. The additional CPP account's net return was 0.9% for the quarter, and the five-year annualized net return was 4.7%. _____________________ 1 Certain figures may not add up due to rounding. The additional CPP was designed with a different legislative funding target and contribution rate compared to the base CPP. Given the differences in its design, the additional CPP has had a different market risk target and investment profile since its inception in 2019. As a result of these differences, we expect the performance of the additional CPP to generally differ from that of the base CPP. Furthermore, due to the differences in its net contribution profile, the additional CPP account's assets are also expected to grow at a much faster rate than those in the base CPP account. CPP Investments Net Nominal Returns1 (For the quarter ended June 30, 2024) Base CPP Five-Year 7.8 % 10-Year 9.1 % Additional CPP Five-Year 4.7 % Since Inception 5.5 % 1 After CPP Investments expenses. Long-Term Financial Sustainability Every three years, the Office of the Chief Actuary of Canada, an independent federal body that provides checks and balances on the future costs of the CPP, evaluates the financial sustainability of the CPP over a long period. In the most recent triennial review published in December 2022, the Chief Actuary reaffirmed that, as at December 31, 2021, both the base and additional CPP continue to be sustainable over the long term at the legislated contribution rates. The Chief Actuary's projections are based on the assumption that, over the 75 years following 2021, the base CPP account will earn an average annual rate of return of 3.69% above the rate of Canadian consumer price inflation. The corresponding assumption is that the additional CPP account will earn an average annual real rate of return of 3.27%. CPP Investments Net Real Returns1,2 (For the quarter ended June 30, 2024) Base CPP