The Canada Pension Plan reported Thursday that it had a net loss of $1.1 billion in the fiscal year ended March 31, 2003. That’s a negative return of 1.5%.

The loss compares with a $2.3 billion gain in the previous fiscal year for a positive 5.7% return. At March 31, 2003, consolidated CPP assets stood at $55.6 billion.

Equities and real estate lost $4.1 billion in fiscal 2003 for a negative 21.1% return, compared with a $316 million investment gain in the previous year for a 3.4% return.

“Global equity markets continued their punishing slump, producing some of the worst annual returns in a century, while fixed income markets delivered solid returns, as interest rates fell,” said CPP Investment Board president and CEO, John MacNaughton.

“The consolidated CPP assets performed better than might have been expected because a relatively high percentage was invested in fixed income securities. As a result, losses were mitigated but not eliminated,” MacNaughton said.

Of the total CPP assets, 69%consisted of $38.1 billion in fixed-income securities administered by the Department of Finance in Ottawa.

The other 31%, or $17.5 billion, was in equities, real estate and other assets managed by the Toronto-based CPP Investment Board.

The plan’s fixed-income securities — $31 billion in federal and provincial government bonds and $7.1 billion in cash — earned $3 billion during the year for an 8.4% return, up from 5% in the previous year.

“While investing during declining markets requires fortitude, it affords us an excellent opportunity to invest in equity markets at lower values and is consistent with our investment strategy to build long-term value to help sustain the CPP, ” MacNaughton said.

“Capital markets history gives us confidence that we are right in staying the course. We will continue building and diversifying our portfolio steadily and patiently, while remaining focused on the long term.”