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Investment Results

As the administrator of the Plan, LAPP Corporation develops and maintains an investment policy — known as the Statement of Investment Policies and Procedures (SIPP) — that establishes the investment principles, policy guidelines, asset mix, and overall approach to the investment management of the Plan’s investments.

Alberta Investment Management Corporation (AIMCo) is responsible for the day-to-day investment management of LAPP’s portfolio of assets in accordance with the SIPP. By legislation, the Government of Alberta has designated AIMCo as the sole provider of investment management services to LAPP.

Market sentiment was decidedly gloomy at the beginning of the fourth quarter. However, sentiment turned around completely by the start of November, when forward-looking optimism over the prospects of more benign central bank monetary policies and interest rate cuts in 2024 propelled both stock and bond markets on a furious rally to close the year on a higher note.

In Q4, the Plan’s investments generated a return of +4.35% — underperforming the Plan’s +5.39% policy benchmark return by approximately -1.04%. For the entirety of 2023, the Plan returned +7.63% compared with a policy benchmark return of +8.98%, underperforming by -1.35%.

The Plan experienced strong returns in both publicly traded equities and bond markets. However, LAPP’s real estate assets were not immune to the challenging dynamics of the real estate industry, and certain infrastructure assets had disappointing operating performance in the higher-interest rate and post-pandemic environment, both of which contributed to relative underperformance.

Longer-term returns remained positive. As at December 31, 2023, the LAPP portfolio generated a four-year annualized return of +5.30%, outperforming the policy benchmark return of +4.61% by +0.69%.

For detailed quarterly investment results of the Plan, visit Funding and Investment.


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