AIMCo earned a total fund return of 7.9% gross of fees for the year ended March 31, 2012, generating $5.2 billion in investment income gross of fees and exceeding the AIMCo total Fund benchmark by 2.0%. After fees of 0.5%, total fund net return was 7.4%. The return on pension and endowment assets net of fees was 8.2%. Short-term and special purpose government funds earned 4.2% net of fees.
Active management contributed $1.3 billion of gross return above the AIMCo Composite benchmark in fiscal 2011/12. On a net of fees basis, $973 million returned was earned.
Public equities performed extraordinarily well in 2011/12, generating $501 million of net added value for our clients, after fees. The performance was driven by strong results across all strategies employed.
Fixed income underperformed on the year, as we were defensively positioned for an increase in North American interest rates. However, interest rates dropped in response to concerns over U.S. economic growth and fears over the European debt crisis. This generated an unrealized capital loss on bonds, and contributed to the negative relative performance.
AIMCo’s growing exposures to unlisted asset classes also added value. Real estate performed particularly well, generating $436 million of net value-added, driven by a rise in Canadian portfolio valuations. Private equity and timberlands also performed well, while Infrastructure lagged behind the very strong performance of its listed benchmark.
Efforts to add value by underweighting or overweighting asset classes resulted in a small loss, as we had taken a somewhat defensive position by being marginally underweight in public equities.