NEWSLETTER. Fund Review for February Information about the York University Pension Fund

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1 February 2018 NEWSLETTER Information about the York University Pension Fund Fund Review for 2017 Most equity markets across the globe posted a positive return in year The Canadian Equity Market performed relatively well with a 9.1% return for the year. After recovering in the third quarter, the energy sector lagged again in the fourth quarter. Energy was the only sector to finish the year with a negative return in the Canadian benchmark. In the United States, the return of the equity market was 13.8% for the year. Information Technology was the top performing sector, with many companies in the sector reporting strong sales and profit growth. U.S. companies were also buoyed by tax reforms that were passed late in the year that are expected to increase corporate earnings. The international equity benchmark was up 16.8%, on improvement in the economic outlook for Europe and earnings growth. Concerns over political uncertainty have partly lifted after elections in France, Germany, and Japan. During the year, the Bank of Canada increased the key lending rate twice to 1.0%. On January 17 th, 2018, it was raised again to 1.25%. In the United States, the Federal Reserve raised the federal funds target range to 1.25% %. However, expectations regarding low inflation may temper the pace of future increases in the interest rate. In this environment, long term bonds outperformed short term bonds. The Canadian long bond index ended the year with a return of 7.0%. The Canadian dollar appreciated 7.0% against the U.S. dollar and 3.4% against the Japanese yen. The Canadian dollar depreciated -6.0% against the Euro and -2.2% against U.K. pound sterling. At the start of the year, the U.S. dollar was strong in part due to high interest rate and growth expectations relative to other countries. But with improving outlooks in other countries during the period, that divergence narrowed, and the U.S. dollar weakened.

2 Fund Review for 2017 (cont d) Equities were a large driver of the return in 2017, contributing about two-thirds of the York University Pension Fund s return. Overall, 2017 was a good year for the York University Pension Fund, with a gross return of 12.4% matching the benchmark return. 25% 20% Pension Fund Performance 20.7% Q Years 15% 10% 5% 5.3% 14.0% 5.9% 9.0% 8.2% 12.9% 3.0% 8.8% 3.3% 12.4% 12.4% 11.1% 10.4% 5.6% 5.1% 0% -0.4% -5% Results are based on information provided by the Fund custodian and by Willis Towers Watson, a third-party firm hired to measure the Fund and managers performance. Returns do not include expenses. The benchmark is a composite of the market indices calculated using the same proportions as the investment policy.

3 Fund Review for 2017 (cont d) The current target asset allocation of the York University Pension Fund is 20% Canadian Bonds, 10% Global Bonds, 50% Equity, 10% Infrastructure, and 10% Real Estate. During the year, the Pension Fund implemented the first step of the equity portfolio restructuring. TD Asset Management and Unigestion Asset Management were hired for low volatility global equity mandates, and the Fund s passive Equity mandates were terminated. During the year, two new Infrastructure managers and two new Real Estate managers were retained. For the Fund at year-end, the actual allocation to the various asset classes and investment managers was:

4 Net Fund Rate Calculation The Fund return for 2017 net of investment expenses was %. This net return is used for crediting interest to the members accounts and determining the annual adjustment for pensioners. For 2017, the details of the net fund return calculation are as follows. (A) Market Value Jan. 1, 2017 $2,314,158,117 Contributions University contributions $39,840,838 Members' contributions $34,936,340 Total Contributions $74,777,178 (I) Investment Income $284,859,723 Benefits paid Pensions Paid ($88,826,349) Death Benefits ($3,689,978) Transfers Out ($14,657,504) Total Benefits Paid ($107,173,831) Investment Expenses Investment Management Fees ($8,157,902) Other Investment Expenses ($2,522,236) (E) Total Investment Expenses ($10,680,138) Plan Administration Expenses ($1,098,873) (B) Market Value Dec. 31, 2017 $2,554,842,176 Net Fund Return for % =2*(I-E)/(A+B-(I-E)) Fund Returns for past calendar years: Fund Return for % Fund Return for % Fund Return for % Fund Return for %

5 Annual Pension Meeting Date: Thursday, April 12, 2018 Time: Place: 12:10 pm to 12:50 pm Room D, Vari Hall, Keele Campus Leona Fields, Director, Pension Fund will present information about the Pension Fund investments and performance in After the presentation, Terisa Ducharme, Associate Director, Pension & Benefits will be available to answer questions related to the pension plan in the Q&A session. All active, deferred, and retired plan members are welcome. If you are unable to attend this session in person, it will be broadcast live on the internet and you will be able to view the presentation from your computer. It will also be recorded for future viewing. Further details on web viewing will be provided in advance of the meeting. We also encourage you to submit topics that you would like covered in the presentations. Please send an to with suggestions or questions you would like addressed at the meeting. For more information on Pension Fund investments, contact: Leona Fields, Director, Pension Fund at For more information on Pension Plan benefits, contact: Terisa Ducharme, Associate Director, Pension & Benefits at ext , or at Websites: