The Canada Pension Plan Investment Board (CPP Investments), Canada’s largest public pension fund, is showing a marked preference for tech giant Apple over electric vehicle (EV) manufacturers. In the first quarter of 2023, the pension fund increased its stake in Apple, while notably decreasing its investments in prominent EV makers.
CPP Investments purchased 255,943 additional Apple shares, increasing its total holdings to 760,518 shares. In contrast, it significantly reduced its positions in Tesla, NIO, XPeng, and Li Auto.
At the close of 2022, CPP Investments held 959,728 shares in Tesla, 2.3 million American depositary receipts (ADRs) in NIO, 621,300 ADRs in XPeng, and 536,797 ADRs in Li Auto. By the end of Q1 2023, the fund’s holdings in these companies had dropped to 454,055 shares in Tesla, 1.6 million ADRs in NIO, 61,000 ADRs in XPeng, and zero ADRs in Li Auto, reports Barron’s.
CPP Investments’ recent activity could be influenced by Apple’s robust performance in the stock market. The tech firm’s shares rose 27% in Q1 2023 compared to the S&P 500 index’s 7% rise. This trend has continued into Q2, with Apple’s shares seeing a 6.4% increase, outperforming the index’s 2.3% rise.
Recently, Apple announced a “multiyear, multibillion-dollar agreement” with Broadcom to develop 5G radio frequency components and other wireless connectivity solutions, further strengthening its market position.
On the other hand, while Tesla’s stock soared by 68% in Q1 2023, it saw a decline of 6.9% in Q2. The ADRs of Chinese EV manufacturers NIO, XPeng, and Li Auto gained 7.8%, 12%, and 22%, respectively, in Q1. However, NIO and XPeng’s ADRs have seen a significant decline in Q2 by 27% and 26%, respectively. Li Auto, however, managed a 13% increase in Q2.
The decrease in Chinese EV manufacturers’ stock can be attributed to various factors, including aggressive price cutting by Tesla. Despite the overall downturn, Li Auto outperformed its Chinese counterparts in Q2. The firm reported record EV deliveries in Q1 and expects this trend to continue, boosting its stock performance.
Back in February, it was reported CPP purchased nearly 600,000 shares of Tesla in Q4 2022, while selling 85% of its Apple stake in the same quarter. Now the CPP loves Apple again it seems and is trimming its EV holdings it seems.
CPP Investments, with assets worth $420 million as of March 31, did not comment on these investment shifts. Whether the pension fund will capitalize on Li Auto’s recent performance or stick to its tech-first investment approach remains to be seen. As these dramatic shifts in holdings reveal, CPP Investments is evidently keeping a keen eye on the fluctuating trends in the tech and EV industries.
