With invested assets of $12 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 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*
In 2009, the Plan benefited from the rebound in Canadian and global public equity markets, as well as strong returns from our infrastructure and real return bond portfolios. As a result, OPTrust achieved an investment return of 13.6%, compared to the 14.3% return for our benchmark and the Plan’s 6.75% funding target return for the year.

The Plan’s net investment income for 2009 totalled $1.3 billion. As a result, the Plan’s net assets increased to $12 billion at year-end, up by $1 billion from 2008. The Fund’s strong growth in 2009 contrasts with OPTrust’s investment loss of 16.2%, or $2.4 billion, in 2008 as a result of the global financial crisis.

Over 15 years of operation, OPTrust has achieved an average annual return of 8.4% since 1995, outperforming both its 7.5% average benchmark return and the Plan’s 7.3% funding target for the same period.

OPTrust’s diversified portfolio achieved a 13.6% return for 2009, compared to 14.3% for our weighted benchmark and the Plan’s 6.75% funding target return. OPTrust’s average return of 8.4% since the Plan’s launch in 1995 exceeds both our benchmark and the Plan’s funding target for the same period.

More information on OPTrust’s investment goals and results will be available in June in our 2009 Annual Report. Detailed information on OPTrust's investment strategy is available in our Statement of Investment Policies and Procedures (PDF, 89 KB).