This is your daily pension announcement: The Pension War Room unleashes AIMCo's investment results and some whoop-ass! Available for download here. #ABLeg #handsoffmypension #travisfail

https://www.aimco.alberta.ca/Media/News-Views

On the surface of the press release things sound good! AIMCo earned a net (of fees) return of 10.6% in 2019. But, as I have said many times, this number is nearly meaningless for comparison purposes. ATRF has a different year end and a different asset mix. #ABLeg

As Kevin would tell you, end date and asset mix need to be controlled to make this kind of comparison over a one year time frame.

CEO Kevin does admit a little ways down:

"we acknowledge that in the short-term we have not met our clients’ expectations.” #ABLeg #owthathurts

That is because they earned a lower return than their benchmark (in fact a whole 0.5% below benchmark). Remember that the benchmark is the aggregate of index returns. If you regularly earn below bench you should lay off your staff and just index the whole kit and caboodle. #ABLeg

Performance against a benchmark would be an informative comparison to ATRF. Not perfect, but informative. Hmm...how did ATRF do relative to benchmark? #ABLeg #handsoffmypension

ATRF 1 year return 1.4% above bench (AIMCo 0.5% below)

ATRF 4 year return 0.8% above bench (AIMCo 0.5% above)

ATRF 10 year return 0.9% above bench (AIMCo 0.8% above)

AIMCo's relative returns really speak for themselves.

#ABLeg #travisfail

Of course, I would argue that Kevin has been around AIMCo for about half of the 10 year period. So I would not attribute 10 year returns to him. ATRF compared to benchmark (which controls for asset mix) outperforms on a 1,4, and 10 year basis. #ABLeg #suckitpetermilburn

I have a talent at translating corporate boiler plate baffle-gab. So, allow me to comment on the rest of the press release. Foreshadowing:

"In extreme markets such as this one... the typical benefits of portfolio diversification will be diminished in the short-term." #ABLeg

Tru Dat! Things are going to suck return wise because of COVID! That is the benefit of relative (to a benchmark) performance measure. If the market is -15% and your fund returns -12% then you are doing your job! Still 2% above bench. #ABLeg

This performance relative to a benchmark is how the most of the investment bonuses for AIMCo staff are decided. The total fund return would need to be some threshold above benchmark for investment bonuses to pay. The threshold might be 0.65% above bench. #ABLeg

It will be super interesting to see what bonuses are paid out this year. Not only was total fund less than threshold it was less than benchmark by far. I will analyze the results here as soon as they are released. #ABLeg Watch carefully for any bonus restructuring!

If ATRF starts experiencing benchmark or below returns from AIMCo then any savings Travis was hoping to achieve will be gone. This has been the most frustrating part of this whole thing for me. Travis is being intentionally obtuse in only considering costs and not returns. #ABLeg

But, Travis' mantra is to keep his yap shut on pensions. People, please force him to open it. Poor decision based on no research and analysis.

Kevin offers one further softball insult in his press release: #ABLeg #handsoffmypension

"AIMCo is operationally independent — operating on commercial principles and at arms length from the Government of Alberta — yet strategically aligned with the Province as shareholder."

Yeah, that's right, AIMCo only recognizes the GOA as a shareholder. Workers? Nope. #ABLeg

If the GOA is your sole shareholder how independent can you be?

If you walk into AIMCo HQ in Edmonton you would be impressed by the quality of the finish. Complete with a glass conference room in which you can snap your fingers and the glass changes from clear to opaque. #ABLeg

All of that bought with significant dollars from pension plan members. Joint pension plan since the 1930's but AIMCo has only one shareholder? Really? #ABLeg Use my anger to catapult your own action. #handsoffmypension