UK - Balanced funds have posted a second consecutive year of negative returns for the first time since 1973/74, according to the latest CAPS Pooled Pension Fund survey.
The CAPS survey found that the median return for balanced funds was -11.9% in 2001, compared with -3.6% in 2000. Equities, globally, produced double-digit negative returns, although respite was found in fixed income and real estate which posted returns of 3% and 5.6% respectively.
UK equities - despite the fourth quarter rally - barely managed to beat the FTSE All Share index in 2001. UK equities funds managed to post a 8.7% median return during the fourth quarter, but for the year the median return for funds was -13.1, compared to the index’s -13.3%.
Overseas equity funds posted bigger losses - losses CAPS attributes to funds favouring European stocks over North American. The median return was -16.8%, compared to -14.1% for the index.
The 2001 results for the 90 balanced funds surveyed are as follows:*1st - J Rothschild (GAM). During the fourth quarter, the £63m fund posted a 9.1% return, leaving it at 17th for the months October to December. However, over the past 12 months, the fund produced the only positive result in the survey, a 12.8% return.
*2nd - J Rothschild (Schroder). The £100m fund came in second with a -5.5% return for 2001, and was ranked eighth for the fourth quarter with a 9.9% return.
*3rd - P&D Life Managed. Phillips & Drew's £69.4m fund finished the year third with a -7% return. During the fourth quarter the fund placed 30th, with an 8.6% result.
The 2001 fourth quarter results were as follows:*1st - London Life. During the fourth quarter the £10.2m fund posted the outstanding result, a 12.2% return to take first place. Over the 12 month period, the result was less than stellar, with a -11.4% return, ranking it at 37.
*2nd - OM Gerrard. The £105m fund finished the quarter second with a 11.4% return, and finished a woeful 80th over the past year. The 12 month result for the fund was -20%.
*3rd - Winterthur Life. The £152.2m fund came in at third for the quarter with a 10.4% return. Over the year, the fund returned -9.6%, ranking it at 16.
The 2001 UK equities results for the 90 balanced funds surveyed are as follows:
* 1st - Standard Life UK Select. The £13m Standard Life fund was the best performer overall for UK equities in 2001, finishing the year with a -1.7% return. During the fourth quarter, the fund was ranked second with a 13.9% return.
* 2nd - Equitable High Income. The £244m fund came in second with a -3.5% return for 2001, and was ranked 74th for the fourth quarter with a 7% return.
* 3rd - Invesco Exempt Trust. Invesco’s £41.2m fund finished the year third with a -3.7% return. During the fourth quarter the fund finished seventh, with a 12.5% result.
The 2001 fourth quarter UK equities results were as follows:
*1st - GAM Multi UK. GAM’s £31.4m fund was the best performer for UK equities in the fourth quarter, posting a 14% return. For the 12 month period, the overall return was -13.2%, leaving it in 41st place.
*2nd - Standard Life UK Select. The fund was a strong performer in 2001, finishing the year with a -1.7% return. For the fourth quarter, the fund had a 13.9% return.
*3rd - Prudential M&G Light Green. The £3.3m fund returned 13.9% in the fourth quarter and -16.9% for the year. The fund was ranked at number 72 for 2001.
Additionally, the CAPS research shows that the fixed income weightings in balanced funds rose from 12.5% to 13.6% in 2001. Despite this increase, allocation to fixed income still remains below the 1998 peak of 15.6%. Cash fell from 6.6% to 4.7%, whilst property allocations hardly chan
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