SS: Relevant due to continued discussion over capital outflows from the US, dollar depreciation and political instability.
> President Donald Trump sent the US dollar tumbling last week by suggesting he was comfortable with its recent weakness. Some Canadian pension managers are taking him at his word. They’re looking east and west for places to put capital, diversifying their US-heavy portfolios. Toronto Transit Commission Pension Fund, manager of about C$9.2 billion ($6.7 billion) of assets, has been increasing its exposure “most significantly” to Europe, according to Chief Investment Officer Andrew Greene. About 40% of the pension fund is allocated to the US and 30% to Canada, according to Greene. “We’re probably relatively light to Europe compared to the rest of the portfolio, and I do think there’s some opportunity there,” he said.
> Institutional investors the world over have been trying to adjust to an investment environment in which US policy can shift rapidly. Trump started a global equities rout last April with the chaotic rollout of his “reciprocal tariffs” on dozens of countries — only to backtrack a week later, sparking a roaring stock rally. More recently, investors have worried about serious tensions in the transatlantic alliance over Trump’s desire to control Greenland, and about political pressure on the central bank. All of that is driving some institutions to examine their geographic exposure.
> UBC Investment Management, which oversees about C$7 billion of assets for the University of British Columbia, is focused on Asian markets for diversification. “We understand there is growing concern in markets right now about the possibility of US dollar depreciation, and those concerns are not without merit,” Chief Executive Officer Dawn Jia said in an emailed response to questions. The fund isn’t going to overreact to short-term political developments, she said, because it’s managing money for the long term. Still, it’s trying to gain exposure “to a wider set of regional economies — particularly Asia Pacific,” Jia said.
> Last week, the Investment Management Corp. of Ontario mentioned the Swiss franc, the Japanese yen and gold as potential alternatives to the US dollar in its “World View 2026” report. Canada’s responses to US trade policy, including a new focus on building major infrastructure projects, may broaden the range of local investment opportunities, the report said. TTC Pension has been adding to Europe exposure over the past couple of years and holds some real estate, infrastructure and private credit in the region, Greene said. The chief investment officer said he’s concerned about the uncertainty created by Trump’s tariffs and his threats to the Federal Reserve’s independence. But the day-to-day rule of law for conducting business in the US still exists, he said. “There’s more pressure from the Fed to do what the government does, whether that’s actually happening or not, but at least it’s a perception,” Greene said. “If the Federal Reserve loses independence and just becomes an arm, their mandate becomes different.”
> Trump has repeatedly criticized Jerome Powell for his views on interest rates and has repeatedly mocked the Fed chair. Last month the Department of Justice subpoenaed the central bank in a criminal probe related to Powell’s testimony about a renovation project at the Fed’s headquarters — a move that upset even some of the president’s allies. Trump has tapped Kevin Warsh as Powell’s successor. But Senator Thom Tillis, who holds a post on the Senate Banking Committee, has vowed to block all Fed appointments until the DOJ matter is resolved. “This process of prosecution has to end before I’m willing to vote to confirm anybody — even somebody as good as Warsh,” he told reporters Friday, calling the investigation into Powell “bogus.”
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SS: Relevant due to continued discussion over capital outflows from the US, dollar depreciation and political instability.
> President Donald Trump sent the US dollar tumbling last week by suggesting he was comfortable with its recent weakness. Some Canadian pension managers are taking him at his word. They’re looking east and west for places to put capital, diversifying their US-heavy portfolios. Toronto Transit Commission Pension Fund, manager of about C$9.2 billion ($6.7 billion) of assets, has been increasing its exposure “most significantly” to Europe, according to Chief Investment Officer Andrew Greene. About 40% of the pension fund is allocated to the US and 30% to Canada, according to Greene. “We’re probably relatively light to Europe compared to the rest of the portfolio, and I do think there’s some opportunity there,” he said.
> Institutional investors the world over have been trying to adjust to an investment environment in which US policy can shift rapidly. Trump started a global equities rout last April with the chaotic rollout of his “reciprocal tariffs” on dozens of countries — only to backtrack a week later, sparking a roaring stock rally. More recently, investors have worried about serious tensions in the transatlantic alliance over Trump’s desire to control Greenland, and about political pressure on the central bank. All of that is driving some institutions to examine their geographic exposure.
> UBC Investment Management, which oversees about C$7 billion of assets for the University of British Columbia, is focused on Asian markets for diversification. “We understand there is growing concern in markets right now about the possibility of US dollar depreciation, and those concerns are not without merit,” Chief Executive Officer Dawn Jia said in an emailed response to questions. The fund isn’t going to overreact to short-term political developments, she said, because it’s managing money for the long term. Still, it’s trying to gain exposure “to a wider set of regional economies — particularly Asia Pacific,” Jia said.
> Last week, the Investment Management Corp. of Ontario mentioned the Swiss franc, the Japanese yen and gold as potential alternatives to the US dollar in its “World View 2026” report. Canada’s responses to US trade policy, including a new focus on building major infrastructure projects, may broaden the range of local investment opportunities, the report said. TTC Pension has been adding to Europe exposure over the past couple of years and holds some real estate, infrastructure and private credit in the region, Greene said. The chief investment officer said he’s concerned about the uncertainty created by Trump’s tariffs and his threats to the Federal Reserve’s independence. But the day-to-day rule of law for conducting business in the US still exists, he said. “There’s more pressure from the Fed to do what the government does, whether that’s actually happening or not, but at least it’s a perception,” Greene said. “If the Federal Reserve loses independence and just becomes an arm, their mandate becomes different.”
> Trump has repeatedly criticized Jerome Powell for his views on interest rates and has repeatedly mocked the Fed chair. Last month the Department of Justice subpoenaed the central bank in a criminal probe related to Powell’s testimony about a renovation project at the Fed’s headquarters — a move that upset even some of the president’s allies. Trump has tapped Kevin Warsh as Powell’s successor. But Senator Thom Tillis, who holds a post on the Senate Banking Committee, has vowed to block all Fed appointments until the DOJ matter is resolved. “This process of prosecution has to end before I’m willing to vote to confirm anybody — even somebody as good as Warsh,” he told reporters Friday, calling the investigation into Powell “bogus.”