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Canada's first sovereign wealth fund

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Re: Canada's first sovereign wealth fund

#91

Post by triceratops »

AnthonyMouse wrote: post #65
triceratops wrote: post #50

Earlier quoted context omitted.

I really like the ideal of just chucking it all in VTI (or, since it's Canada, some other equivalent). But does it still work at that scale? Or does the fund exert its own gravitational field on the index in question?

The gravitational field of indexes that large is one of the reasons why it works. The stock price of a company will generally increase when it's added to a major index because there are now so many more people trying to buy it as part of the index. The risk is nominally that if you ever wanted to move a fund that large into some other investments, the act of selling would lower the price of the assets in the fund. Bu…

> The gravitational field of indexes that large is one of the reasons why it works

I'm confused because my question was whether a sovereign wealth fund could move an index by too much. Not about the issues with index investing (which IMO are mostly overblown).

Re: Canada's first sovereign wealth fund

#92

Post by caminante »

akamaka wrote: post #89
lesuorac wrote: post #24

Earlier quoted context omitted.

Why does it matter if volatility is lower than the market? Future payments in the short term are covered by inflows. You might as well maximize the returns now so that in the future when it's not covered by inflows you've acrewed a larger return.

> Future payments in the short term are covered by inflows. That wouldn’t work in a major depression when there is high unemployment and inflows drop.

Well, it could absorb it because its horizon is past the depression.

Let's not forget, CPPIB underperformed a passive benchmark during the Great Financial Crisis and lost 18.8% in FY09.

Re: Canada's first sovereign wealth fund

#93

Post by morepork »

bparsons wrote: post #29
WorkerBee28474 wrote: post #5

If this is run anything like the CPP, it will underperform both the market and their own benchmarks yet lead to executives awarding themselves huge bonuses.

Over the last decade (and even prior to that) CPPIB has been the best performing fund of its kind. National pension funds have different risk tolerances and investment guidelines that someone's personal portfolio or a family office. Thanks to CPPIB, Canada does not have have a giant unfunded pension liability (unlike our neighbors to the south). It has been an enormous success story.

I thought that honour belonged to the NZ super fund with an annualised return of 10% before tax since it's creation in 2003. I couldn't find a comparable figure for the CPPIB, but it looks to be lower.

https://nzsuperfund.nz/

Re: Canada's first sovereign wealth fund

#94

Post by caminante »

akamaka wrote: post #88
AnthonyMouse wrote: post #67

Earlier quoted context omitted.

> One time out of five, the consequence of that investment strategy is 'The market had a crash and I lose everything '. Which is why that strategy doesn't actually beat the market. Keep using it for 30 years and you're bankrupt. Whereas if you put your money in a major index 30 years ago and left it there, or even 50 or more years ago, what result? Are you even in a bad place if you put all your money into the market…

Yes, if a retirement fund had put all their money into a stock index in 1926, it wouldn’t have been able to pay out pensions throughout the 1930s and 1940s and would have been bankrupt before the market eventually recovered. Going full index is a great strategy for an individual person aged 20-50, but not a strategy for a pension fund which needs to continuously pay out.

> Going full index is a great strategy for an individual person aged 20-50, but not a strategy for a pension fund which needs to continuously pay out.

It's OK for a person in their 70s that has a few million in the bank.

This person (CPPIB) has 780 billion and has a sustainability rating for 75 years.

Re: Canada's first sovereign wealth fund

#95

Post by lovich »

petermcneeley wrote: post #84
lovich wrote: post #81

Earlier quoted context omitted.

So you were just complaining because you don’t like the guy?

Your response is the quality of argument that I have come to expect in Canada.

Well I’m from the US so you’re wrong on that point.

Your quality of comment is what I expect from conservatives who think their feelings are reality and complain about shit without making solid inferences or connections.

It’s a sovereign wealth fund and you’re complaining that one of the larger Canadian companies is included in it because Carney worked there. Then when pressed you say you wish someone else represented your(presumably you’re Canadian) people.

That’s just kvetching.

Re: Canada's first sovereign wealth fund

#96

Post by rapind »

incomingpain wrote: post #33

A sovereign wealth fund requires surpluses to be run. This is not a wealth fund at all. This is a debt fund. It doesnt even try to hide the debt that's drowning the federal government. We are borrowing money to play the stock market.

This is exactly what I was thinking when I heard him speak about it. Borrowing for a slush fund for the projects (probably many of them American) they want to push... which in a way just means another future tax.

Calling it a "sovereign wealth fund" doesn't seem honest at all. (coming from a lifelong Liberal / NDP voter)

Re: Canada's first sovereign wealth fund

#97

Post by akamaka »

caminante wrote: post #94
akamaka wrote: post #88

Earlier quoted context omitted.

Yes, if a retirement fund had put all their money into a stock index in 1926, it wouldn’t have been able to pay out pensions throughout the 1930s and 1940s and would have been bankrupt before the market eventually recovered. Going full index is a great strategy for an individual person aged 20-50, but not a strategy for a pension fund which needs to continuously pay out.

> Going full index is a great strategy for an individual person aged 20-50, but not a strategy for a pension fund which needs to continuously pay out. It's OK for a person in their 70s that has a few million in the bank. This person (CPPIB) has 780 billion and has a sustainability rating for 75 years.

$780 billion divided by 6 million current recipients is a little over $100,000, which is hardly comparable to your wealth retiree example.

Re: Canada's first sovereign wealth fund

#98

Post by petermcneeley »

lovich wrote: post #95
petermcneeley wrote: post #84

Earlier quoted context omitted.

Your response is the quality of argument that I have come to expect in Canada.

Well I’m from the US so you’re wrong on that point. Your quality of comment is what I expect from conservatives who think their feelings are reality and complain about shit without making solid inferences or connections. It’s a sovereign wealth fund and you’re complaining that one of the larger Canadian companies is included in it because Carney worked there. Then when pressed you say you wish someone else represente…

> Perhaps I would have simply had someone different represent Canadians. Is this too much to ask?

This was in reference to Carney. I dont think Carney represents the people very well.

It is not a sovereign wealth fund. The name is intended to clash with a real sovereign wealth fund like say Norway has. Basically you need wealth and Canada has the inverse of wealth it has deficits.

The fund was created (of course) by debt. It is a bit like borrowing to invest in the stock market rather than trying to invest your savings/income. Canada already has massive federal debt due to insane levels of mismanagment.

So why would Canada create such a bizarre 'fund'. Well it is what happens when you put a banker in charge of a country. You get banking solutions to country problems.

So now you see why Carney's career path matters. This is just the tip of the iceberg. If you want to know more I can link you to many facets that you might find interesting.

Re: Canada's first sovereign wealth fund

#99

Post by lovich »

petermcneeley wrote: post #98
lovich wrote: post #95

Earlier quoted context omitted.

Well I’m from the US so you’re wrong on that point. Your quality of comment is what I expect from conservatives who think their feelings are reality and complain about shit without making solid inferences or connections. It’s a sovereign wealth fund and you’re complaining that one of the larger Canadian companies is included in it because Carney worked there. Then when pressed you say you wish someone else represente…

> Perhaps I would have simply had someone different represent Canadians. Is this too much to ask? This was in reference to Carney. I dont think Carney represents the people very well. It is not a sovereign wealth fund. The name is intended to clash with a real sovereign wealth fund like say Norway has. Basically you need wealth and Canada has the inverse of wealth it has deficits. The fund was created (of course) by…

>So now you see why Carney's career path matters. This is just the tip of the iceberg. If you want to know more I can link you to many facets that you might find interesting.

Nah I don't. So far I'm batting 11/12 for going down the rabbit hole with anti Carney Canadians before i find out they were in support of the trucker convoy.

Benefit of the doubt is gone if you don't open up with actual thought out critique.

Re: Canada's first sovereign wealth fund

#100

Post by robocat »

somewhereoutth wrote: post #11

I believe wealth taxes (really, wealth restitution) should go into sovereign wealth funds - not least as then the public can see how that money is working for them, and so support the continuance and expansion of such taxes.

Submarine nationalisation/communism. Just use a wealth tax until the wealthy don't own anything. Please ensure you simultaneously destroy any self-made businesses.

No country requires business growth or an economy /s.

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