On October 9, 2018, 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 2.2% net of all investment-related fees and expenses during the first six months of 2018. This return was 0.9% lower than the University’s target return of 3.1% (inflation + 4% per year). Over the same period, UTAM’s active management approach outperformed the passive Reference Portfolio benchmark and contributed 0.6% of value added. The short-term working capital fund (EFIP) managed by UTAM returned 0.9% during the first six months of 2018, which was 0.2% lower than the University’s target return for this portfolio (365 day T-bill return + 0.5% per year).
Mr. Smith noted that UTAM’s active management approach for Pension and Endowment had outperformed the passive approach embedded in the Reference Portfolio by approximately 1.8% per year over the last five years and by approximately 0.6% per year over the last ten years (net of all investment-related fees and expenses, including UTAM costs). Mr. Smith highlighted that the 1.8% outperformance per year over the last five years equated to over $550 million of value added to the Pension and Endowment portfolios on a combined basis.