Compared to Global Peers, Canadian Pensions Invest Way Less At Home

If you’re a normal person, you probably spend hardly any time thinking about Canada’s pension funds.

You almost certainly don’t spend time thinking about all of the ways that Canada’s big pension funds are significant outliers compared to their global peers.

We can see this illustrated clearly, looking at data from Global SWF, a consulting firm that tracks the biggest sovereign wealth funds and public pension funds around the world.

Firstly, Canada’s pension funds are very big. Of the 100 largest pension funds in Global SWF’s data, 10 are Canadian. Together, these funds manage US$2.1 trillion, which is a truly huge pool of capital. For comparison, that figure is about 90 per cent of Canada’s entire GDP in 2025.

As you can see, it’s not just that the Canadian pension funds sneak into the top 100, but five of our big pension funds show up in the top 25 globally.

But here’s the really interesting thing: Canada’s pension funds are investing significantly less at home, as compared to the other big funds in the Global SWF data set.

Averaging together the top 100 biggest pension funds globally, they invest 58 per cent of their assets in their home market. 

For the Canadian funds, it’s less than half. On average, the top 10 biggest Canadian pension funds invest 26 per cent of their assets at home in Canada.

As you can see, the Canadian funds all cluster on the bottom end of the distribution, and CPP, Canada’s largest pension fund, is at a meagre 12 per cent.

There’s a lot of debate about how much the big Canadian pension funds should invest in Canada. In fact, we argued in a recent policy paper that they should be doing a lot more! 

But in fairness, the pension funds are not primarily a vehicle for economic development. Their job is to earn returns for members and manage risk, and investing globally is part of that. But the gap between the Canadian funds’ approach, and the overall global picture cannot go without notice. Canada has built some of the world’s largest institutional investors, yet most of the capital they manage is deployed outside the country.

Maybe you’d argue that the Canadian pension funds are simply smarter, better, faster, stronger than all of those other countries. That the Canadian strategy is right, and eventually the global capital allocators will start copying our approach. On the other hand, maybe we could entertain the notion that it’s normal for pension funds to invest in their home countries, and it would be nice to see the Canadian funds embrace that wisdom.

But it’s not just the raw geographic allocation. The way the Canadian pension funds invest also stands out in the context of the global data. 

Canada’s pension funds really are at the vanguard of “alternative investments” — that means any kinds of investments outside of traditional public equities and bonds. 

Global SWF’s definition of “alternative investments” includes real estate, infrastructure, private equity and hedge funds. 

Looking at this class of assets, the Canadian funds really are an enormous outlier. Six of the big Canadian pension funds have more than half their assets in these “alternative investments.”

What this says to me is that Canada’s pension fund managers are, in fact, extremely sophisticated, strategic, and creative asset allocators. They are not just buying the stock market, they are going out and hunting for interesting and innovative ways to invest their capital.

They’re just … for some reason … not doing it in Canada very much.

We should really ponder this reality. Perhaps, the answer is that Canada is just a uniquely dismal place for investment. Our pension fund managers don’t see good prospects here.

If that’s true, obviously that’s a problem. We need to fix our economy, and make sure that there are exciting assets for them to invest in. (The airports?)

On the other hand, let’s look at a different ranking: The Globe and Mail top growing companies list was just published in September.

This list collects 375 Canadian companies with significant revenue growth over the past three years. The top 34 companies on the list have seen revenue growth of more than 1,000 per cent in the last three years.

These are promising Canadian companies that could absolutely benefit from Canadian capital to propel their growth. 

If only we had sophisticated pools of capital, that could stand to invest a little bit more at home.