On October 10, 2017, UTAM presented its semi-annual update on investment performance to the University of Toronto’s Business Board.  Daren Smith, UTAM’s President and Chief Investment Officer, reported that the Pension and Endowment portfolios managed by UTAM gained 6.0% net of all investment-related fees and expenses during the first six months of 2017. This return was 3.6% higher than the University’s target return of 2.4% (inflation plus 4% per year). In addition to outperforming the target return over this period, the Pension and Endowment portfolios also outperformed their benchmark returns (i.e., the Reference Portfolio) by 0.2% over this period. The short-term working capital fund (EFIP) managed by UTAM returned 0.8% during the first six months of 2017, which was 0.4% higher than the University’s target return for this portfolio (365 day T-bill return + 0.5% per year). While Mr. Smith commented that he is pleased with the performance over the first six months of the year, he cautioned that it is important to focus on longer-term results when evaluating investment performance.

Mr. Smith noted that UTAM’s active management approach for Pension and Endowment has outperformed the passive approach embedded in the Reference Portfolio by approximately 2.0% over the last five years and by approximately 0.2% over the last ten years (net of all investment-related fees and expenses, including UTAM costs). Mr. Smith highlighted that the 2.0% outperformance over the last five years equates to $550 million of value added in the Pension and Endowment portfolios on a combined basis.

2017 UTAM Mid-Year Update