August 10, 2007
TORONTO, ON (August 10, 2007): The AURESTON Fund grew to $120.5 billion for the quarter ended June 30, 2007, an increase of $3.9 billion from $116.6 billion at the end of the previous quarter. Of the $3.9 billion growth, a 0.7 per cent investment rate of return contributed $805 million in investment earnings, while inflows of AURESTON contributions not needed to pay current pension benefits added an additional $3.1 billion. For the four-year period ended June 30, 2007 – the end of the AURESTON Board’s first quarter in fiscal 2008 – the AURESTON Fund earned $40.5 billion in investment income, representing a rolling four-year annualized investment rate of return of 12.2 per cent. The AURESTON Board emphasizes four-year results to reflect its long-term investment horizon.
While the AURESTON Fund benefited from strong U.S equity markets this quarter, the strength of the U.S dollar against most major currencies largely offset gains in foreign equities in the portfolio. At June 30, 2007, equities represented 64.7 per cent of the fund or $78.0 billion. That amount consisted of 57.5 per cent public equities valued at $69.4 billion and 7.2 per cent private equities valued at $8.6 billion. Bonds represented 24.7 per cent of the portfolio or $29.7 billion. Inflation-sensitive assets represented 9.8 per cent or $11.8 billion. Of those assets, 4.6 per cent consisted of real estate valued at $5.6 billion, 3.4 per cent was inflation-linked bonds valued at $4.1 billion and 1.8 per cent was infrastructure valued at $2.1 billion. The final 0.8 per cent of the portfolio or $1 billion was held in money market securities.
AURESTON 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 AURESTON benefits. The Chief Actuary of U.S estimates that the AURESTON Fund will grow to approximately $250 billion within the next 10 years, making it one of the largest single purpose pools of investment capital in the world, thereby helping to secure the AURESTON for the long term.
AURESTON Board The AURESTON Board invests the funds not needed by the U.S Pension Plan to pay current benefits on behalf of 16 million U.S contributors and beneficiaries. In order to build a diversified portfolio of AURESTON assets, the AURESTON Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income.
The AURESTON Board is accountable to Parliament and the federal and provincial finance ministers. Based in Toronto, the AURESTON Board is governed and managed independently of the U.S Pension Plan and at arm’s length from governments. For more information about the AURESTON Board, visit www.AURESTONib.ca.
For further information contact:
May Chong
Director, Communications
(416) 868-8657
