Canada’s largest pension funds continue to heavily invest in the U.S., despite concerns over trade wars and threats to Canadian sovereignty. The Canada Pension Plan (CPP) recently announced reaching a record $780.7 billion in assets, with 47% of its investments in the U.S. and only 13% in Canada. This allocation has remained unchanged since President Trump’s inauguration.
Since 2005, when Canadian pension foreign holdings limits were lifted, the CPP’s U.S. investments have steadily grown to $366 billion, surpassing its $98 billion investments in Canada. A CBC analysis revealed that the “Maple Eight,” including major pension funds like OMERS and PSP, collectively hold $1 trillion in U.S. assets.
CPP spokesperson Michel Leduc addressed concerns about geopolitical risks, emphasizing their long-term investment strategy. Despite current events, the CPP’s U.S. exposure is below the global investment diversification standard, as per indices like the MSCI World Index and Financial Times Stock Exchange 100.
The call for increased domestic investments within Canada has gained traction. Investment leaders, like Daniel Brosseau, urge pension funds to consider investing more within the country. Sen. Clément Gignac highlighted the changing investment landscape, with Canadian funds reevaluating their U.S. holdings due to economic uncertainties.
Recently, the Maple Eight fund managers met with Canada’s finance minister to explore new investment opportunities and promote more domestic investments. While there are no regulations mandating Canadian investments, the government encourages collaboration for mutual growth. Pension funds are focusing on low-risk, predictable returns through strategic asset allocations.
The CPP reported substantial returns despite geopolitical tensions, emphasizing their commitment to long-term investment strategies. As opportunities arise in Canada’s transformative projects, pension funds are actively engaging with government partners to explore potential ventures that align with their investment objectives.