Balancing positive returns while managing risk

PEPP is balancing positive returns while managing risk to grow your retirement savings. 

'Downside protection' strategies help your PEPP account in volatile markets

Imagine having a special shield called "downside protection" when playing a game. Now, let's say you can lose points if something bad happens. The shield protects you from not losing too many points.

Downside protection is a safety feature investors use to minimize losses during market downturns.

Two common forms include asset diversification and asset allocation. 

PEPP's approach to downside protection 

First, PEPP has been diversifying its investments across different asset classes, such as equity, alternatives, and income.

Second, PEPP is changing its asset allocations across various investment categories. 

One of the best ways to minimize negative returns in stocks and bonds is through alternative investments. This includes real estate, infrastructure, farmland, liquid alternatives, private credit and to a lesser extent, private equity. 

PEPP’s alternative portfolio is having its strongest performance ever! Recently, the Plan's alternative strategies produced positive returns despite negative markets. It's in times like these when PEPP's performance stands out against peers and retail funds.

PEPP's strategic reviews ensure your account sees steady growth

The PEPP Board conducts a strategic review of the Plan’s investment structure, investment options and asset mix every three to four years. The most recent review was done in 2022-2023. 

The process involves a critical assessment of the Plan and risk/return modelling. This ensures PEPP is innovative and optimally structured. The review is led by the Board’s Strategic Investment Consultant. 

Why this matters

The Board understands that members want to earn competitive long-term returns during their career to save for retirement.

Knowing members are responsible for their own investment choices, the Board must also ensure investment options are appropriate and offer a variety of risk and 
return profiles. 

Strategic reviews are long-term focused. This means we are not chasing fads. Rather, this allows PEPP to build a plan structure that leads to more predictive risk-measured results. 

Learn more about Investing in PEPP by visiting pepp.plannera.ca > understand your pension > investing in pepp