Quebec pension fund manager sees 7.9% loss in first half of 2022

Quebec's pension fund manager, the Caisse de dépôt et placement du Québec (CDPQ), has its work cut out for it as it reported a negative return of nearly eight per cent for the first half of 2022.

As stocks tumbled, the pension fund's net assets declined by $28.2 billion, from $420 billion to $392 billion.

The CDPQ outperformed its benchmark, which was down 10.5 per cent, but still posted a 7.9 per cent loss. In 2021, the institution saw a return of 13.5 per cent.

Charles Émond, the CDPQ's CEO, said the losses are driven by "a combination of factors not seen in decades," like skyrocketing inflation and interest rates, corrections in stock and bond markets and the war in Ukraine.

But the CDPQ notes that over five- and 10-year periods, its annualized returns are 6.1 per cent and 8.3 per cent, respectively.

Despite the CDPQ's real estate assets underperforming its benchmark, the sector still reported positive returns of 10.2 per cent. Infrastructure had a positive return of 5.8 per cent.

Its stock portfolio fared worst — seeing a 16 per cent decline for the first six months of 2022.

Markets rebounded in July, which could ease the fund's losses in the second half of the year.