Global Market Rout Means 'Buy' Amid Panic, CPP's Wiseman Says

  • Economic fundamentals don't warrant stock plunge: Wiseman
  • CPP, other investors unveiled new 'long-term value' index

The sell-off roiling stock markets from Shanghai to New York offers an opportunity to buy assets as long-term prospects for economic growth remain favorable, the head of Canada’s largest pension fund said.

“Absolutely it’s a buying opportunity, when the world is panicking and you have a quintessentially long-term view,” Mark Wiseman, the chief executive officer of Canada Pension Plan Investment Board, said in an interview at the World Economic Forum. “Whatever negative market sentiment there is, I don’t believe is supported by the facts that are coming out.”

Wiseman spoke as global equities neared the brink of a bear market and oil fell to almost $28 a barrel, its lowest level since 2003. The market rout has dominated conversation at the annual meeting in the Swiss resort town of Davos.

Rather than change its strategy, CPPIB is buying equities to maintain the balance of its portfolio between stocks, bonds and other assets. The Toronto-based fund manages about C$273 billion ($188.6 billion) on behalf of 18 million Canadian savers.

Separately, CPPIB on Thursday joined five other large institutional investors, including the New Zealand Superannuation Fund and Ontario Teachers’ Pension Plan, to announce the creation of a stock index focused on long-term performance. The Standard & Poor’s Long Term Value Creation Index is designed to track companies that meet criteria on corporate governance and environmental sustainability, among other measures.

The index is the latest development in a campaign by some large investors to push companies to focus less on quarterly results. Larry Fink, the CEO of BlackRock Inc., in April wrote to all 500 companies in the benchmark S&P 500 Index to urge them to avoid meeting "short-term financial goals at the expense of building long-term value."

The six founding funds, which also included Singapore’s state-controlled GIC and the Dutch pension fund ATP Group, will initially allocate $2 billion to the index, they said.

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