With invested assets of $11 billion, OPTrust manages one of Canada’s largest pension funds. Our investment objective reflects our long-term commitment to provide more than 82,000 members and pensioners with a secure lifetime income in their retirement.

Our investment strategy is designed to generate the long-term investment returns needed to provide our members and retirees with a secure lifetime pension, while keeping risk within acceptable limits.

Funding target return
To meet our funding obligation, the Plan’s investment portfolio must generate an average real rate of return (after inflation) of 4.0%, over the long term. Assuming inflation of 2.75% per year, the Plan’s nominal target return is 6.75% for funding purposes.

This long-term return objective is the key criterion in establishing our asset mix, developing the Plan’s investment strategy, and determining an appropriate level of investment risk for the Fund. The target return also provides a key reference point for evaluating OPTrust’s investment performance against our funding requirement, particularly over the long term.

Weighted market benchmark
Over short-term time horizons, we expect the Plan’s returns to rise and fall from year to year, in response to the same factors that shape the overall performance of the markets in which we invest.

We therefore compare the Fund’s investment performance to a composite “benchmark portfolio” that mirrors OPTrust’s asset mix and the performance of key indices for each asset class. This provides a useful way to gauge the value added by OPTrust’s active investment managers, compared to an equivalent passively managed portfolio.

Long-term performance*
Like most major institutional investors, OPTrust experienced an investment loss in 2008 as the global financial crisis produced a steep drop in global equity and credit markets.  The Plan’s return for the year was -16.2%, compared to -16.8% for our weighted benchmark.

In contrast, OPTrust’s portfolio has achieved an average annual return of 8.1% over the fourteen years since the Plan’s inception in 1995. This return exceeds both the Plan’s average funding target of 7.4% for the same period and the 7.1% average return for our benchmark portfolio.

Detailed information on OPTrust's investment strategy is available in our Statement of Investment Policies and Procedures (PDF, 89 KB).

OPTrust’s -16.2% return for 2008 reflects the sharp drop in equity markets in the second half of the year. Against this negative backdrop, our return bettered our weighted benchmark for the ninth year running. The average annual return since the Plan’s inception in 1995 exceeds both our benchmark and the Plan’s funding target return for the same period.