Investment Update from the CEO

January 28, 2016Chris Brown

In my last investment update, I noted that we had not yet seen the full impact of lower oil prices and equity market volatility in our fund performance to the end of the second quarter. Looking at the LAPP's Q3 Investment Report, we can see that more of that impact was felt in the third quarter ending September 30, 2015 as we posted a negative 1.8% return. As a result, the year-to-date investment return declined from 5.1% at the end of Q2 to 3.3% at the end of Q3.

An area where lower oil prices have impacted the Plan has been through the performance of the Canadian equity market. As indicated by the chart below, the Canadian equity market has been a rollercoaster ride through the year. The S&P/TSX Composite Index start the year reasonably well, rising almost a 1000 points to a high of 15524.8 early in the year and then declining to a low of 12,617.7 in December. The key driver in market performance was lower oil prices given the heavy weighting of energy in the index.