The strong growth in repurchase demands has contributed to a decline in the net assets of the fonds de solidarité FTQ to 13.8 billion $, while $ 15.6 billion at the end of the last fiscal year.
June 30, 2020 12: 43
A yield of 0.8% to the solidarity Fund QFL
The canadian Press
MONTREAL — The economic storm caused by the pandemic COVID-19 has prompted tens of thousands of depositors of the Fonds de solidarité FTQ to require the redemption of their shares, making to leap forward the invoice to an amount never before seen — approximately three billion dollars since the inception of the organization, in 1983.
During the last three months of the fiscal year ended may 31, not less than 61 000 applications have been received, while the annual average oscillates around 49 000, said the Fund, on Tuesday, unveiling an annualized return of 0.8 %, or $ 230 million. On a five-year horizon, the performance of 6.4 %.
“We have always managed our assets accordingly with the cash to [do overs],” said its president and chief executive officer, Gaétan Morin, in a telephone interview.
“We had observed the same phenomenon, but with a lesser extent, in 2008” during the recent financial crisis.
The Fund reassesses its course of action at the end of December and at the end of its fiscal year. This means that its share price remained unchanged at 46,20 $ while the stock markets posted significant declines when the health crisis struck, in march. Dated as of may 31, the share value has been reduced to the remaining 44.24 $.
The strong growth in repurchase demands has contributed to a decline in the net assets of 13.8 billion $, while $ 15.6 billion at the end of the last fiscal year. Not less than $ 1.9 billion of shares had been repurchased as of may 31, while the redemptions in treatment were $1.09 billion.
According to Mr. Morin, two factors are at the origin of the increase in the number of redemption requests. First, the example of québec’s demography, time of retirement sounds for a growing number of applicants. In addition, some had decided to wait before withdrawing their investment because of the returns “interesting” generated in the course of the last few years.
At the end of the first six months of its fiscal year, before the outbreak of a public health crisis, the Fund had generated a performance of 5.2 %, before posting a negative return of 4.2% during the second half of its financial year.
Last year, the performance, which does not take into account the impact of tax credits provincial and federal contributions to the labour fund, had been 7.1 %, or 1,13 billion $.
“With 13.8 billion dollars in capital, not debt, that would be the envy of many investment funds around the world, said Mr. Morin, about the results of the last fiscal year. We were at this level, there are hardly two or three years. At this time, we were all as active as today.”
The economic storm has made it so that the Fund has injected $ 1.4 billion in quebec companies last year, which exceeded 40 % of its goal. Even if the organization must navigate “a bit in the fog” because of the uncertain economic environment, it expects that its investments range between $ 800 million and $ 1 billion — its typical range during the current fiscal year, said Mr. Morin.
Last year, the portfolio of development capital investments to québec companies generated a return of 1.9 %, while that of publicly-traded securities fell by 7.7 %. The performance of “other investments”, which take into account fixed-income securities, shares and other securities, was 6.8 %.
At the same time to its net assets of 13.8 billion $ as of 31 may, the Fund had 3329 business “partners” as well as 707 935 shareholders-investors at the end of its most recent fiscal year.
The performance of the Fonds de solidarité FTQ over the past few years
– 2020 : 0,8 %
– 2019 : 7,8 %
– 2018 : 7,5 %
– 2017 : 9,1 %
– 2016 : 4,4 %