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Caisse dumping bonds…”Canada’s bond-dumping frenzy continues…”


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…


Canadian government bond yields have fallen to almost record lows, draining income for pension funds….


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.”

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