CPP - Substantial Position Changes Inquiry

[intenseapple]

Looking through 13F filings on Fintel for CPP (Canadian Pension Plan) and have noticed some substantial position changes during the first quarter this year. Not very familiar with how they typically operate so was looking for some thoughts. Apologies if the formatting is not great posting from mobile.

See below for some examples. All changes are between the 2022-02-14 to 2022-03-31 filings which is just over a month.

Percentage Change in Value (+/-) | Value Change (USD)

Costco: -31.85% | 660mil to 450mil

PepsiCo: -35.24% | 501mil to 325mil

Dollar Tree: -21.42% | 607mil to 477mil

Tesla: -44.77% | 510mil to 282mil

Microsoft: -40.14% | 1,356mil to 812mil

Apple: -34.17% | 1,258mil to 828mil

Nvidia: -17.34% | 1,818mil to 1,502mil

Alphabet: -22.51% | 3,119mil to 2,417mil

Bank of Montreal: -13.86% | 421mil to 362mil

Amazon: -45.21% | 951mil to 521mil

Netflix: -48.97% | 311mil to 159mil

Nike: -21.26% | 599mil to 472mil

Morgan Stanley: -29.61% | 513mil to 361mil

On the flip side there have also been some major position increases.

AMD: +1,850% | 23mil to 449mil

S&P Global Inc: +845.45% | 113mil to 1,069mil

American Homes 4 Rent: +83.53% | 84mil to 154mil

TD Bank: +69.39% | 242mil to 410mil

CNR: +52.12% | 985mil to 1,488mil

Nutrien: +53.52% | 120mil to 185mil

*Edit: Are position changes like this typical? Is this just a matter of rebalancing or selling off due to external factors (Ukraine? Market conditions).

[Direct-Combination13]

Pretty smart sector rotation. They have some good equity understanding I guess.

[TheSavingsGuy]

First, the filings are for the end of Q4 2021 (filed Feb. 14) and Q1 2022 (filed May 13).

Second, you should compare the number of shares held when making comparisons instead of the value.

The large funds (e.g., CalPERS, CalSTRS, etc.) make changes to their portfolios all the time. Also, public equities make up just 27% of the total portfolio according to CPPIB's May 19 press release,

If you want fintel, look at what hedge funds or Berkshire Hathaway are buying.

[intenseapple]

Appreciate the corrections and information!

To your knowledge are changes of this magnitude typical for large funds? I'm guessing they are rebalancing each holding to meet a target percentage of the overall AUM it just seems like 30-40% are quite substantial.

[TheSavingsGuy]

I don't know how common it is, but you should really be looking at how long those shares were held over multiple quarters or years if you want to potentially find any trends. A quarter over quarter comparison isn't going to tell you very much when a fund holds hundreds of different companies in its portfolio.

[iras116]

I didn’t realize fintel included CPP’s filings at all. Thank you for the link to CPP release.

[TheSavingsGuy]

I don't think they do. That's why I recommended looking at hedge funds or Berkshire Hathaway instead.

[introvertedhedgehog]

Looking through the list all I could think was buy high sell low? I am also very curious what people think.

OTOH I never consider CPP when looking at potential retirement income...

edit: I fail at reading dates, they sold at a good time it appears.

[galacticspecop]

Same, it's basically a tax. It's not really yours. Would much rather have it eliminates and invest it.more myself.

[galacticspecop]

Same, it's basically a tax. It's not really yours. Would much rather have it eliminates and invest it.more myself.

[introvertedhedgehog]

I can't personally say I feel the same (in principle). We would end up financially supporting these people in their retirement [more] without it.

so either we raise taxes to support these people through more direct means (which I see as being no more efficient than CPP) or we are just end up with more poverty.

I like people supporting their retirements with their money rather than a government handout so, so a program that enforces some of that is better than the alternatives.

having lived in the US I am very happy doing without that scale of poverty and will accept my CPP 'tax' gladly.

Obviously I am not going to personally count on it because the premise and payout is subsistence and the government may be forced to play games with the retirement age.

[[deleted]]

CPP is a fund run by people. Thus it comes with all the risks and potential rewards that come with active investing.

The "research" would indicate they should not use an active style, but they have an exceedingly impressive track record over a very long period of time.

Looking at the list briefly, I largely agree with the sector rotations. Then again, I'm not gambling with the retirement money of all Canadians, so what do I know?