Canadian pension fund OTPP reportedly increases exposure to bonds

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Canadian pension fund OTPP reportedly increases exposure to bonds

The Ontario Teachers Pension Plan, one of Canada's largest pension funds, is reportedly increasing its exposure to bonds, citing yields that have turned attractive following the worst sell-off in a generation.

According to a report from Bloomberg, the fund's president and CEO, Jo Taylor, said that OTPP, which manages C $243 billion and $177 billion, is raising its holdings of inflation-protected debt.

The move comes after the fund trimmed its bonds last year in favor of infrastructure and property investments to hedge against inflation, as per the report.

Taylor was quoted as saying that we will probably increase our allocation to fixed income a bit, but we are still lightly allocated compared to what we might have been.

The fund's top holdings include GFL Environmental Inc GFL, Microsoft Corporation MSFT, and Amazon.com, Inc. AMZN, according to whalewisdom.com.

OTPP plans to shift to longer-term bonds after earlier seeking refuge in shorter-duration debt in order to better withstand the surge in borrowing costs. He said that Australia's bonds yielding 4% to 5% are something that we may change a bit, where we're picking to have longer-duration bonds because they offer us interesting interest rates.