LAPP’s financial position continues to improve and our progress is detailed each year in our audited financial statements, which are published as part of our Annual Report each July. The most recent statements available, as signed by the Auditor General of Alberta, are for the year ending December 31, 2016. You can read detailed information about last year’s investment performance in the 2016 Annual Report.
The Board tracks investment performance throughout the year and receives quarterly investment reports that, once approved by the Board, are published on this website Funding & Investment Publications, under the heading Quarterly Investment Reports.
In 2017, the LAPP fund returned 10.1% net on its investments and 1.14% over the policy benchmark.
During the first two quarters of 2017, the fund’s equity and fixed income allocations and, in particular, investments in global equities and long bonds contributed the most to the fund’s positive performance. The fund returned 4.61%, outperforming the policy benchmark by 0.18%.
While the positive momentum in equity markets continued throughout the third quarter, bonds sold off in response to two Bank of Canada interest rates hikes in July and in September, and in anticipation of further interest rate increases. The fund experienced modest returns of 0.60% and outperformed its policy benchmark by 0.30% during the quarter.
The fourth quarter’s return of 4.79% with 0.67% of value added was backed by positive absolute and relative returns in the equity, bond, infrastructure and real estate portfolios.
Strong investment results boosted the Plan’s assets to a value of $42.7 billion as of December 31, 2017, further improving the Plan’s funding position. The positive effect of investment performance on the Plan’s financial standing will be reflected in the Plan’s actuarial valuation completed later this year.