Public market investments make up the largest proportion of OPTrust’s $13.3 billion investment fund. These investments, which include Canadian and international equities, bonds, other publicly traded securities and cash, accounted for more than 75% of the Plan’s assets at the end of 2010.

OPTrust invests in these securities primarily through external, active investment managers. The Trust’s market exposure is diversified by asset class, geographic region and investment style. 

Fixed income investments
The Fund’s allocation to fixed income assets is designed to generate a stable stream of income to help fund the Plan’s pension obligations. Fixed income investments include traditional corporate and government bonds and non-marketable Government of Ontario debentures. At December 31, 2010, the Plan's fixed income investments represented 19.5% of the Total Fund.

OPTrust also holds a portfolio of government-issued real return bonds that are linked to the rate of inflation. This portfolio was valued at 9.6% of the total fund at the end of 2010.

Public equities
OPTrust’s allocation to public equities offers the prospect of capital appreciation, which is necessary for the enhancement of the Trust's value over the long term. At the same time, public equity investments expose the Fund to higher levels of volatility than many other asset types.

While a substantial portion of the Plan’s public equity investments are in Canadian companies, our portfolio is increasingly global in scope, including exposure to companies in emerging markets. At the end of 2010 our Canadian and global equity portfolios accounted for 21.2% and 25.8% of the fund, respectively.

Over the next several years, these allocations will be reduced to 10% and 15% of the fund, as part of OPTrust’s long-term diversification strategy.

Investment performance
In 2010, these portfolios generated annual returns of 19.3% for Canadian equities, 11.5% for foreign equities and 11.9% for fixed income investments (including real return bonds). These results exceeded the Plan’s composite benchmark returns for each asset class for the year.

Public Market Investments Group
Our Public Market Investments Group is responsible for carrying out the analysis necessary to structure our public markets portfolios and identify and select our external managers. Once managers are selected, we monitor their investment activity and evaluate their performance on a regular basis.

At the end of 2010, OPTrust employed four external Canadian equity managers, six managers for foreign equity mandates, three fixed income managers, four currency managers and two managers with energy commodity mandates.

[OPTrust’s public market investment managers]