Asset management

The DGPP’s assets are divided into 2 portfolios with separate but complementary roles.

The matching portfolio is generally made up of bonds and fixed-income securities. Some securities are managed directly within the fixed-income portfolio. Other securities are administered using asset portfolio overlay strategies. This bond overlay provides another layer of protection without having to physically hold all the securities.

In 2025, long-term interest rates rose over the course of the year. This increase helped support the DGPP’s excellent financial position, due in part to the structure of the matching portfolio.

Rising long-term rates have resulted in a negative return on the matching portfolio, which is intended to be sensitive to interest rate fluctuations. This strategy may increase the volatility of returns, but it’s still essential for protecting the plan. The strategy helps strengthen the plan’s financial health, ensure stable contributions, guarantee pension payments over the long term and maintain consistency with the organization’s desired level of risk.

At the end of 2025, the bond overlay portfolio was valued at $6.3 billion. We carried out hedging ratio optimization transactions during the year to keep an adequate level of protection. These adjustments helped maintain the plan’s excellent financial health.

The performance portfolio includes investments in public equity, private equity, private debt, infrastructure and real estate assets.

The performance portfolio delivered a very solid return of 10.6% in 2025. Public equities were the main driver of the portfolio’s performance, supported by favourable conditions for the Canadian and US equity markets. Private assets also generated gains, which remain above long-term targets.

However, 2025 was a turning point for the real estate market as it gradually recovered from a period of weakness. In the infrastructure portfolio, difficulties remained concentrated in certain assets, while the rest of the portfolio continued to achieve its long-term targets.

Looking at the longer term, the annualized return over 10 years is 10.6%. All asset classes posted annualized returns that were higher than their respective target returns, helping the DGPP preserve its long-term financial health.

The performance portfolio generated positive added value during the last fiscal year. The performance of the private equity portfolio, supported by the co-investment strategy, manager selection and overweighting in Europe, contributed significantly. In contrast, the dominance of unprofitable company securities has put the public equity portfolio at a disadvantage compared with its benchmark index.