What Canada’s big pension plans were buying and selling in the first quarter of the COVID-19 market

Some of Canada’s largest pension plans made significant changes to their equity holdings during a first quarter that saw markets plunge in response to the COVID-19 pandemic, recent filings suggest.

But the major funds, which must disclose their U.S.-listed holdings on a quarterly basis to the U.S. Securities and Exchange Commission, appeared to take different approaches in navigating the crisis.

The Ontario Teachers Pension Plan and the Caisse de dépôt et placement du Québec, for example, appeared to be buyers when it came to their bigger positions, using the quarter to add to many of those stakes. The Alberta Investment Management Corp. and the British Columbia Investment Management Corp., meanwhile, pared many of their top holdings.

Regardless of the strategy, most saw the value of their bigger holdings decline during the three-month period ending March 31.

Teachers, for example, saw its US$636-million stake in Macerich Co., a U.S. real estate investment trust that invests in malls, decline in value by US$495 million.

The pension, which has $207 billion in assets under management, also saw the value of its investment in Cushman & Wakefield PLC, a real estate services firm, fall to US$171 million from US$299 million at the end of 2019.

Notably, Teachers did not sell out of either position.

Meanwhile, it added to its positions in many of the other names in its Top 10 holdings, including Alibaba Group Holding Ltd., Lyft Inc. and BlackBerry Ltd.

The Caisse similarly boosted the number of shares it held in some of its top names, such as Berkshire Hathaway Inc. and Johnson and Johnson Co.

The Quebec pension, which has $340 billion in assets under management, saw large disclosed positions in some of Canada’s big banks plunge in value.

The 12 million shares it owns of RBC were previously worth US$1 billion but fell to US$777 million, while its 17 million shares of Bank of Nova Scotia lost more than 25 per cent of their value.

AIMCo, meanwhile, did some selling among its top disclosed holdings, which include RBC, Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Manulife Financial Corp., Enbridge Inc. and Canadian Pacific Railway Ltd.

AIMCo sold 19 per cent of its stake in RBC and 68 per cent of CIBC.

AIMCo didn’t appear to do much buying, but the companies it did buy a large number of shares in were also Canadian. The pension increased its position in one of the top performing stocks in the downturn in Shopify Inc., by 148 per cent and doubled its stake in Franco-Nevada Corp.

BCI’s sales also resulted in the two Canadian names, Brookfield Asset Management and Canadian National Railway, entering its Top 10 holdings.

BCI, which has an AUM of $153 billion, may have taken some losses on Boeing Inc. It held 675,145 shares of the airplane manufacturer that were worth US$219 million in  December and as of March 31, that was down to just 58,555 shares worth US$8.7 million.

BCI also wasn’t shy with its decision to sell financial stocks, eliminating more than 85 per cent of its stakes in Berkshire and Citigroup Inc. and more than 70 per cent in Goldman Sachs Group Inc. and Wells Fargo & Co.

When asked about how it positioned itself during the downturn, a BCI spokesperson said the pension had been anticipating a sell-off and positioned its portfolio for defence.

“As a long-term investor, our investment activities are driven by our commitment to generating long-term returns for our clients and their beneficiaries,” the spokesperson said. “We continue with our nimble and disciplined investment approach during this period of disruption.”

Ontario Teachers and the Caisse would not comment on their portfolios. AIMCo did not return a request for comment before publication.

Source: Financial Post