Excerpt:
LEE ADLER
Canada’s biggest pension-fund manager will “significantly” cut its C$64 billion ($62.3 billion) allocation to bonds as the fixed-income market’s foothold among its most loyal base of investors grows less certain.
Caisse de Depot et Placement du Quebec Chief Executive Officer Michael Sabia said he’s scaling back fixed-income investments that account for 36 percent of its C$176 billion of assets…
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Canadian government bond yields have fallen to almost record lows, draining income for pension funds….
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Sabia, 59, plans to increase investments in assets such as real estate, infrastructure and private equity to reduce volatility in the Caisse’s returns. He’s also planning a C$20 billion fund that invests in the equity of large, global companies such as Nestle SA (NESN) and Colgate-Palmolive Co. (CL)
“To me, there’s less risk sitting in that portfolio than there is sitting in a fixed-income portfolio,” Sabia said. “With yields where they are, people are searching for yield anywhere they can, and that’s had a ripple effect on asset pricing across a variety of different asset classes.”
