“Remarkable” Year for $18.4 Billion Fund
For AIMCo’s Chief Investment Officer, it feels like a trip back in time. Commenting on the investment performance of the Alberta Heritage Savings Trust Fund for 2021, Dale MacMaster noted strong returns not seen in decades.
“We’d have to go back to the early ’90s to see similar returns.”
Income from the Heritage Fund, valued at $18.4 billion on September 30, 2021, funds Albertans’ priorities like health care, education and infrastructure. AIMCo is the fund’s investment manager.
MacMaster, joined by AIMCo’s CEO Evan Siddall and Chief Fiduciary Management Officer Amit Prakash, appeared before the Standing Committee on the Alberta Heritage Savings Trust Fund on Tuesday.
The committee meets quarterly to review the fund’s performance and uses the opportunity to ask questions related to AIMCo’s management of investments.
The committee was presented with the fund’s second quarter investment report, which included the following performance highlights:
A 2.4% return over the quarter, outperforming the benchmark returns of 1.4% by 1.0%
A 1-year return of 16.5%, surpassing the benchmark of 10.3% by 6.2%
A 10-year return of 10.1%, surpassing the benchmark of 9.6% by 0.5%
When asked about the contributors to the Heritage Fund’s investment performance, MacMaster called the year “remarkable”, with exceptional returns from private equity and public equities. Markets rallied as earnings recovered and investors grew more confident in the COVID-19 situation.
While MacMaster reminded the committee that expectations should be tempered with rising volatility in the markets, Prakash added that the fund is well diversified with exposures such as private debt performing very well in the current environment.
“From a design perspective, the portfolio is constructed in a resilient manner that continues to be reviewed by the team, I think sets it up in a favourable manner as we look forward,” said Prakash.
A transcript of the meeting is available here.