Caisse CEO Charles Emond at a press conference in August, 2024. Mr. Emond says on Tuesday that tariffs were a major concern for the pension fund as the markets plunged in April.Graham Hughes/The Canadian Press
The Caisse de dépôt et placement du Québec earned a 4.6-per-cent return in the first half of the year, beating its 4.3-per-cent benchmark as the pension fund’s chief executive officer warned the full economic impact of U.S. tariffs is not yet clear.
Total assets increased $23-billion to $496-billion in the six months to June 30, and the fund also surpassed its benchmarks for five- and 10-year returns. Over the last decade, the Caisse has earned an average annual return of 7 per cent.
Publicly-traded equities led the way with a 6-per-cent return, bolstered by a 4.5-per-cent gain from infrastructure investments. Real estate lagged, increasing by 0.1 per cent and falling short of a 1.2-per-cent benchmark, and private equity recorded a modest 3.4-per-cent increase.
Caisse CEO Charles Emond cautioned that tariff issues stemming from U.S. policy were a “major concern” in the first half of the year as markets plunged in April before bouncing back, and could still be cause for concern in the coming months.
“Despite this overall performance, we must remain vigilant as we have yet to see the full effects of the U.S. administration’s measures,” Mr. Emond said in a statement.
One scenario on the Caisse’s radar is the possibility that tariff measures could slow the U.S. economy and raise prices, driving up inflation and causing central banks to respond by holding interest rates higher.
“The rest of the year will be interesting,” Mr. Emond said at a Tuesday press conference with reporters. “The full impact of inflation has not been felt.”
A rapid depreciation of the U.S. dollar put a dent in the Caisse’s returns, as though a hedging strategy offset nearly half of the potential losses.