One of the largest public pensions in the world recently invested heavily in big technology stocks, and initiated a stake in a battered Chinese stock.
Canada Pension Plan more than doubled an investment in
Apple,
scooped up more shares of
Microsoft
and
Tesla,
and started an investment in
Alibaba
Group Holding in the fourth quarter. Canada Pension Plan Investment Board, known as CPP Investments, which manages the pension, disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
CPP Investments declined to comment on the investment changes. As of Dec. 31, 2023, the fund had assets of $435 billion. Canada Pension Plan is one of the 10 largest public pensions in the world by assets, according to
WTW
and the Sovereign Wealth Fund Institute.
The pension bought 2.5 million more Apple shares in the fourth quarter to lift its investment to 4.5 million shares.
Apple provided disappointing revenue guidance in early February that overshadowed its strong fiscal-first-quarter report. Later that month, a report said Apple halted efforts to produce an electric vehicle, and shifted resources to developing generative artificial-intelligence software.
Apple stock surged 48% in 2023, compared with a 24% rise in the
S&P 500 index.
So far this year, shares are down 6.7% while the index is 7.7% higher.
Microsoft stock rose 57% last year, and so far in 2024 shares are up 10%.
With Microsoft stock’s outperformance of Apple’s shares, the former’s market capitalization has now surpassed that of the iPhone maker. Both companies are the first two publicly traded entities to have reached $3 trillion market caps. An analyst report from Barclays in late February said that Microsoft’s opportunity in advertising could grow to $50 billion over time.
The pension bought 1.4 million Microsoft shares to end the fourth quarter with 3.5 million shares.
CPP Investments bought 147,090 Tesla shares in the fourth quarter to lift its investment to 525,193 shares.
If Tesla investors were relieved that Apple was killing its plans to make an EV, they didn’t show it. Shares of
Elon Musk’s
company barely moved on the news, as a sector malaise continues. The Wall Street Journal reported in December that EV sales were losing momentum. For Tesla in particular, a troubling sign is that it fell behind China’s BYD in quarterly EV sales for the first time in the fourth quarter.
Tesla stock doubled in 2023, and so far in 2024 shares are down 18%.
Alibaba American depositary receipts slipped 12% last year, and are 3.7% lower so far this year.
The online giant and its peers have been pressured by China’s continuing deflation. Not even the Lunar New Year rallied investors, who are fixated on the indebted property sector. At the end of February, Alibaba announced price cuts to help its cloud division.
CPP Investments bought 3.6 million Alibaba ADRs in the fourth quarter. The pension owned none at the end of the third quarter.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
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