#Canada #Montreal #Public Pension #PSP Investments #Canada Growth Fund

PSP Investments Achieves Solid Performance Outperforming 10-Year Benchmarks in Fiscal 2026

In a remarkable display of fiscal strength, PSP Investments has closed its financial year on March 31, 2026, with net assets under management reaching CAD 320.6 billion. This figure represents a significant 7.0% increase from the previous year, showcasing the robustness of its investment strategy and management. Moreover, the fund achieved a net return of 6.5% for the year, along with an impressive annualized net return of 8.8% over a ten-year period.

This performance not only underscores the financial health of the public service pension systems PSP Investments oversees, which include those for the federal government, Canadian Armed Forces, Royal Canadian Mounted Police, and the Reserves, but also confirms their ongoing sustainability amid turbulent market conditions.

Consistent Investment Gains

Over a five-year span, net investment gains exceeded CAD 8.6 billion, while over a ten-year period, they totaled CAD 14.5 billion. This achievement occurred within a framework of preset risk tolerances, highlighting the organization's strategic foresight. PSP Investments' results have comfortably exceeded the actuarial discount rates necessary to meet long-term pension obligations, further solidifying the plans' solid financing status.

Portfolio Highlights

The impressive growth is attributable to sustained long-term investment performance coupled with continuous contributions from pension plans. Investments accrued over 70% of the net assets managed by PSP Investments, while government transfers since April 1, 2000, accounted for the remaining 30%.

Deborah K. Orida, the President and CEO of PSP Investments, stated, "Despite increased volatility and uncertainty, PSP Investments achieved solid results and continued to strengthen the long-term financial position of the plans we manage. Our long-term results, stability of returns, and funding of the plans are the best indicators of how we fulfill our role as a pension investor."

Strategic Performance Analysis

One of the highlights of the fiscal year 2026 was that PSP Investments outperformed its benchmarks in approximately 70% of instances since the launch of the reference portfolio. However, the one-year net return fell short by 5.2% when compared with the reference portfolio, primarily due to macroeconomic factors and market conditions that created a challenging landscape for private markets.

Foreign exchange fluctuations impacted results as well, contributing to a decrease of 2.2% for the fiscal year, partially offsetting gains of 5.8% reported in 2025.

Orida commented on these measures, stating, "These outcomes are best evaluated over an entire market cycle. Our portfolio remains well-positioned to create long-term value. We take pride in how we have served our mission and country this year."

Additionally, PSP Investments has invested over CAD 10 billion in Canada during fiscal year 2026, primarily due to increased private direct investments and a higher allocation in Canadian stocks, which performed well this year. As of March 31, 2026, the gross assets under management in Canada were over CAD 75 billion, reflecting the size of PSP Investments’ domestic portfolio.

Performance by Asset Class

The performance across various asset classes highlights the effective management strategies employed:

• - Listed Equities: CAD 92.8 billion, 1-year return of 20.6%, 5-year return of 11.4%, and a 10-year return of 12.3%.
• - Fixed Income Securities: CAD 71.8 billion, with a modest 1-year return of 2.3%.
• - Private Equity: CAD 39.1 billion, achieving a 10-year return of 12.0%.
• - Infrastructure: CAD 32.0 billion, with a solid 1-year return of 10.1%.

Cost Management and Efficiency

In maintaining a disciplined approach to operational costs, PSP Investments reported a drop in expenses, with operational costs falling by CAD 24 million compared to the previous year, resulting in a decrease in the operating expense ratio to 24.7 basis points from 27.9 the year prior. This improvement reflects a sustained focus on efficiency and scalable operations, aligning with PSP Investments' three-year strategic plan.

For fiscal year 2026, total costs amounted to CAD 3.942 billion, a slight increase from CAD 3.885 billion the prior year. PSP Investments also disclosed investment costs by asset class for fiscal years 2025 and 2026 for increased transparency.

Looking Ahead

With robust management and strategic foresight, PSP Investments is well-positioned to continue fulfilling its mandate of securing pensions for those who serve Canada. The organization proudly looks forward to maintaining long-term value creation for its stakeholders while navigating the ever-evolving investment landscape.

For further details on the organization’s ongoing activities and achievements, visit investpsp.com.