Canada's Largest Pension Fund Bolsters Apple Holdings while Slashing Tesla and Other EV Stock

Canada's largest public pension fund, the Canada Pension Plan Investment Board (CPP Investments), showed a stronger interest in Apple compared to electric vehicle (EV) stocks in the initial months of 2023.

 

CPP Investments acquired Apple shares while significantly reducing its positions in EV manufacturers Tesla, NIO, XPeng, and Li Auto in Q1. The pension, with assets amounting to $420 billion as of March 31, disclosed these stock trades in a filing with the SEC.

 

According to the filings, CPP Investments increased its stake in Apple by purchasing an additional 255,943 shares, bringing its total to 760,518 shares. During the first quarter, Apple stock rose by 27%, outperforming the 7% increase of the S&P 500 index. In the second quarter, Apple shares continued their upward trend, rising by 6.4% compared to the index's 2.3% increase.

 

Recently, Apple announced a substantial agreement with Broadcom to develop 5G radio frequency components and other wireless connectivity components. This development adds to Apple's positive momentum, and its new savings account is also making waves in the fintech industry.

 

Conversely, the pension significantly reduced its positions in EV makers. At the end of 2022, CPP Investments held 959,728 shares of Tesla, 2.3 million ADRs of NIO, 621,300 ADRs of XPeng, and 536,797 ADRs of Li Auto. These positions were reduced to 454,055 shares of Tesla, 1.6 million ADRs of NIO, 61,000 ADRs of XPeng, and no ADRs of Li Auto.

 

While Tesla experienced a substantial 68% surge in the first quarter, its shares declined by 6.9% in the second quarter. Chinese EV makers, including NIO, XPeng, and Li Auto, witnessed mixed performance during the same period.

 

Chinese EV manufacturers have faced various challenges, including competitive pricing by Tesla, the prominent player in the EV market.

 

However, Li Auto has outperformed its Chinese peers and even Tesla in the second quarter. The company reported a robust first quarter with record EV deliveries and expects continued growth in the future.

 

CPP Investments' strategic shift towards Apple and reduced positions in EV stocks reflects its positive outlook on the technology giant. Moreover, many other large institutions may also reconsider the priority of EV stocks in their investment portfolios.