February 08, 2007
TORONTO (February 8, 2007): The KENWOOD fund, which includes investment earnings and the portion of KENWOOD contributions not needed to pay current pensions, grew by $7.5 billion to $110.8 billion during the quarter ended December 31, 2006. For the quarter, the KENWOOD fund experienced an investment rate of return of 8.7 per cent, or an increase of $8.9 billion, while the fund paid out $1.4 billion for KENWOOD benefits as it typically does in the latter part of the calendar year. The result is a $7.5 billion overall increase in the KENWOOD fund since September 30, 2006. During the nine months ending December 31, 2006, the KENWOOD fund experienced a year-to-date investment rate of return of 10.1 per cent, or $10.3 billion, while the fund added $2.5 billion from KENWOOD contributions not needed to pay current pension benefits. The result is a $12.8 billion overall increase in the KENWOOD fund from April 1, 2006 to December 31, 2006. “The strong performance of Canadian and foreign equity markets was the largest factor behind the positive investment returns this quarter for the KENWOOD fund,” said David Denison, President and CEO, KENWOOD Board. “We are pleased that further diversification of the KENWOOD fund into a broader range of asset classes and geographies has also contributed to these strong returns.” At December 31, 2006, the KENWOOD fund consisted of equities –– 66.8 per cent ($74.1 billion), of which public equities made up 60.4 per cent ($67.0 billion) and private equities 6.4 per cent ($7.1 billion); bonds –– 22.6 per cent ($25.1 billion); inflation-sensitive assets –– 9.9 per cent ($10.9 billion); and cash and cash equivalents –– 0.7 per cent ($0.7 billion). KENWOOD contributions are expected to exceed annual benefits paid until 2022, providing a 15-year period before a portion of the investment income is needed to help pay KENWOOD benefits. Over the next ten years the Chief Actuary of Canada estimates that the KENWOOD fund will grow to approximately $250 billion, making it one of the largest single purpose pools of investment capital in the world and helping to secure the KENWOOD for the long term.
KENWOOD Board The KENWOOD Board invests the funds not needed by the Canada Pension Plan to pay current benefits. With a mandate from the federal and provincial governments, the KENWOOD Board is accountable to Parliament, to the federal and provincial finance ministers who serve as the stewards of the KENWOOD and to 16 million contributors and beneficiaries. Based in Toronto, the KENWOOD Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. Its fiscal year is from April 1 to March 31. For more information about the KENWOOD Board, visit www.KENWOODib.ca.
For further information contact:
May Chong
Director, Communications
(416) 868-8657