Pension managers are investing less and less in Canadian companies — and that’s a problem, market watchers say – by Christine Dobby (Toronto Star – August 25, 2022)

By the end of 2021, Canadian stocks made up less than 4% of the assets held by the country’s defined benefit plans.

Canadian pension plans control trillions of dollars in contributions from workers, retirees and employers across the country, but in recent years, far less of that money has gone to investments in homegrown companies than in the past.

Peter Letko and Daniel Brosseau, co-founders of the Montreal-based independent investment firm Letko Brosseau, which managed about $27 billion in assets as of 2019, argue elected officials and policymakers should be paying attention to this trend, one they say has been caused by “benign neglect.”

“We think that there’s a there’s a fundamental fallacy in the concept that small countries should not invest in their own economy,” Brosseau said this week in an interview with the Star.

In 2000, investments in Canadian publicly traded stocks represented 28 per cent of total assets held by the country’s defined benefit pension plans (which promise members a set payout on retirement), according to data from the Pension Investment Association of Canada.

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