CHINA - Pension schemes should look to China if they want to boost returns and break free from benchmark-hugging, Martin Currie Investment Management claims.
The fund manager said that while many companies recognised the opportunities of doing business in China, their schemes had been slow to exploit that same growth potential.
Martin Currie assistant director Raymond Morgan said: “Everybody recognises – from a company perspective – the growth in China.
“But what we find is that in terms of world indices, it barely figures.”
At the moment, China makes 7% of the MSCI Emerging Market Free Index and 0% of the MSCI World Index.
“That’s why pension schemes make little or no allocation to it. If there was ever a case for breaking free from the tyranny of benchmark investing, then the argument for investing in China is very clear.”
Martin Currie says the Chinese economy has expanded rapidly with growing demand for consumer goods and commodities and predicts it will continue to do so, especially with the government’s economic reforms and pledge to keep economic growth above 7%.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.