LAPP’s financial position continues to be strong 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 ended December 31, 2018. Financial statements for December 31, 2019 year-end are expected to be published in July 2020.
LAPP Corporation, as administrator of the Plan, establishes high-level investment principles for the Plan through the Statement of Investment Policies and Procedures (SIPP), and investment management of LAPP’s portfolio of assets is undertaken by Alberta Investment Management Corporation (AIMCo). By legislation, AIMCo is designated by the Government of Alberta to be the sole provider of investment management services for LAPP.
The events of Q1, 2020, with the ongoing COVID-19 pandemic, created a very difficult environment for investments. LAPP has not been immune to the impacts of the economic crisis across its full investment portfolio. However, measures put in place through the direction of LAPP in the form of a custom-made downside protection strategy (DPS) have succeeded in protecting the Plan from the worst of the impacts in the stock market. As a whole, the LAPP portfolio returned -6.54% for the quarter versus a return for the Plan’s policy benchmark of -5.27%. The portfolio’s returns for the quarter were significantly helped by the downside protection strategy, which contributed +3.61% to the bottom-line return.
LAPP’s SIPP specifies that AIMCo is expected to deliver a return of 0.85% above the return generated by the Plan’s policy benchmark asset mix over a four-year, annualized time horizon.
As at March 31, 2020, AIMCo generated a four-year, annualized return of 5.85%; this figure includes the positive impact of LAPP’s DPS. This return compares with a policy benchmark return of 5.68% over the same four-year, annualized time horizon. As measured by quarter ends, AIMCo has been short of LAPP’s SIPP-specified value-added expectations for 47 consecutive quarters, or 11 years and 9 months.
Detailed 2020 quarterly investment results of the Plan are published below.
Visit the Funding & Investment page to see previous quarters' investment reports.