Red_Deer wrote: Our CPP Pension Plan SURE DON'T eh !!!!!!!!!!
One of the world's largest pension funds is trying its hand at short-selling, and is making a killing in the process.
The Canada Pension Plan Investment Board disclosed big short positions in Virgin Galactic Holdings, the spaceflight company founded by Richard Branson, and bioplastics company Danimer Scientific. Since 18 January, the investment arm for Canada's national pension plan increased its short position on both stocks to 2.2% and 1.9% of shares outstanding, respectively.
Unusually, the fund upped its position in the two shorts for four days in a row, according to an analysis of the CCP's regulatory disclosures by data firm Breakout Point.
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"That's very rare in our records," Ivan osovi, founder of Breakout Point, told Financial News. The shorts "illustrate how a successful pension fund can, partly, protect themselves via short-selling. CPP is an outlier among pension funds, they are only pension fund regularly disclosing shorts across Europe."
The recent wild swings in markets have proved profitable for the pension fund. Danimer has plunged some 47% this month, while Virgin Galactic has tumbled about 38%. The CCP fund declined to comment to Financial News.
Canada Pension Plan's 10-year annualised net nominal rate of return is 11.6%, according to the fund's website, and as of September, it says assets under management exceed CAD$540bn, or $427bn.
A short-seller borrows stock to sell in the market, then buys it back after the shares decline, returning the stock and pocketing the difference. Most European regulators require funds to publicly disclose short positions exceeding 0.5% of a stock's outstanding shares.
Short strategies have had some bright spots after bull markets dominated in 2021. Since the start of the year, US indexes have trended downward. The S&P 500 came close to correction territory during intraday trading on 24 January. While it closed in the green, it is down nearly 7.5% this year. The Nasdaq is now considered to be in correction -- the index is down more than 10% since 3 January.