OTPP posts $269.6 billion in assets and 2.1% half-year return as currency shift reshapes portfolio
The Ontario Teachers’ Pension Plan (OTPP) cut its US dollar exposure to the lowest level since mid-2021, according to Bloomberg, as the Canadian dollar surged more than 5 percent in the first half of 2025 — its best start to a year since 2016.
Bloomberg reported that OTPP reduced its net exposure to the US currency by 56 percent in the first six months of the year, ending June with $40.2bn in US dollar holdings.
This was part of a broader drop in total foreign currency net exposure to $99.4bn from $142bn at the end of 2024.
Chief investment officer for asset allocation Stephen McLennan said the US dollar this year had been “a headwind for all Canadian domiciled investors” and that the pension had adjusted its expectations for both this year and the next several years.
As per Bloomberg, Canadian pension funds are among the largest holders of US assets globally, making them sensitive to currency swings.
A weaker US dollar can reduce returns on American investments, prompting large funds like OTPP to hedge against that risk.
Analysts at JPMorgan Chase & Co. and TD Securities have recently flagged that increased hedging and potential repatriation could sustain US dollar weakness in the coming quarters.
A June 27 TD Securities report led by Jayati Bharadwaj stated that “increased US dollar hedging and potential repatriation pave the path for the dollar to keep moving lower sustainably for the next couple of quarters.”
Bloomberg noted that the greenback fell about 9 percent in the same period, pressured by US President Donald Trump’s trade war measures and concerns about the scale of government spending plans.
Separately, CTV News reported that OTPP posted a six-month net return of 2.1 percent for the first half of 2025 and a 12-month net return of 7.1 percent. Net assets totalled $269.6bn at June 30.
Chief executive Jo Taylor said the fund’s return was mainly driven by public assets, particularly gold, while private assets were generally flat to negative due to challenging market conditions.
Bloomberg also reported that Taylor described the fund’s positioning during the period as “a bit more risk-off” relative to some peers.
OTPP manages investments for 343,000 working members and pensioners.
