Investments
Canadian Equities
Allocation
10.1%
Annual Return
11.25%
Exposure
$824 M
Benchmark
11.75%
2023 Performance
The Canadian Equity Fund returned a strong 11.25% during the year, trailing the benchmark by 50 basis points.
While the fund benefitted from its overweight in information technology and underexposure in energy and materials, selection proved a headwind for a number of the fund’s positions during the year.
The S&P/TSX posted an 11.75% return in 2023. It overcame headwinds including a US banking crisis, ongoing geopolitical tensions, and Bank of Canada rate increases. Most of the double-digit gain happened in the fourth quarter. That’s when global interest rates peaked and equity markets started to expect and factor in central bank rate cuts. Despite all the ups and downs, US 10-year interest rates ended 2023 almost exactly where they began, at 3.9%.
Information technology was the standout sector, increasing by 65% over the year, largely driven by Shopify, which soared with a return of 120%. In contrast, after two years of strong performance, the energy sector posted a modest return of 6%. Materials and telecommunications were the only sectors that ended the year lower.
Investment Approach
The Canadian equity fund is managed in-house with the goal of achieving better long-term returns than the S&P/TSX benchmark. We do this by managing risk effectively, a challenge given the heavy cyclical and commodity exposure in the Canadian market.
We focus on companies with solid business models, good margin profiles, strong cash flow, and clear opportunities for growth.
Recognizing the favourable risk-to-reward ratio offered by low-volatility investments in Canada, we launched a Low Volatility Fund, which will replace the XIC Index Fund in 2024.
Capital Allocation
The Fund’s 10.1% allocation to Canadian equities represents a similar exposure compared to the policy benchmark weight of 9.5%. The share of Canadian stocks relative to the Fund’s total public equity allocation was 20% at the end of the year.
In the Canadian equity allocation, 90% of the capital was invested in the Canadian Equity Fund and the remaining 10% in the XIC Index Fund.
Canadian Equities
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Allocation
10.1%
Annual Return
11.25%
Exposure
$824 M
Benchmark
11.75%
2023 Performance
The Canadian Equity Fund returned a strong 11.25% during the year, trailing the benchmark by 50 basis points.
While the fund benefitted from its overweight in information technology and underexposure in energy and materials, selection proved a headwind for a number of the fund’s positions during the year.
The S&P/TSX posted an 11.75% return in 2023. It overcame headwinds including a US banking crisis, ongoing geopolitical tensions, and Bank of Canada rate increases. Most of the double-digit gain happened in the fourth quarter. That’s when global interest rates peaked and equity markets started to expect and factor in central bank rate cuts. Despite all the ups and downs, US 10-year interest rates ended 2023 almost exactly where they began, at 3.9%.
Information technology was the standout sector, increasing by 65% over the year, largely driven by Shopify, which soared with a return of 120%. In contrast, after two years of strong performance, the energy sector posted a modest return of 6%. Materials and telecommunications were the only sectors that ended the year lower.
Investment Approach
The Canadian equity fund is managed in-house with the goal of achieving better long-term returns than the S&P/TSX benchmark. We do this by managing risk effectively, a challenge given the heavy cyclical and commodity exposure in the Canadian market.
We focus on companies with solid business models, good margin profiles, strong cash flow, and clear opportunities for growth.
Recognizing the favourable risk-to-reward ratio offered by low-volatility investments in Canada, we launched a Low Volatility Fund, which will replace the XIC Index Fund in 2024.
Capital Allocation
The Fund’s 10.1% allocation to Canadian equities represents a similar exposure compared to the policy benchmark weight of 9.5%. The share of Canadian stocks relative to the Fund’s total public equity allocation was 20% at the end of the year.
In the Canadian equity allocation, 90% of the capital was invested in the Canadian Equity Fund and the remaining 10% in the XIC Index Fund.