PORTUGAL - Portuguese pension funds achieved a 4.6% median return during the second quarter, according to new data from Mercer Investment Consulting, Portugal.
The figures - part of Mercer’s Q2 2003 PIPS (Pension Investment Performance Survey) survey - meant a first half return median return of 4.7%.
A preliminary universe of 188 pension funds was analysed, representing approximately e14bn in assets or 92% of the Portuguese market.
Ana Rodrigues, author of the report, noted that the results were those of funds without specific investment restrictions.
For Q2, the upper quartile was 5.1%, the lower quartile was 3.7%. For the first six months of the year, these figures were 5.1% and 4.0% respectively.
Strategy-wise, the highest average allocation was to bonds (60.6%), although this was down slightly from Q1 (63.4%). This was followed by equities (23.1%); ‘other’ euro-state fixed bonds (22.3%) and ‘other’ European equities (18.4%).
Funds were bearish on Japanese equities which experienced negligible allocations in both quarters (0.0%).
Earlier research also indicated that Portuguese pension funds were retaining a defensive stance.
Watson Wyatt’s SEMP survey showed an average fixed income allocation of 39.2% in Q1, 2003 - a 5.2% increase quarter on quarter.
However, floating rate euro bonds, including cash, were down -5.2% to 27.8%, again quarter on quarter. The most favoured asset class was fixed rate euro public debt (+3.7%). Equity allocations were down -0.6%, property +0.4% and hedge funds +0.2%.
Funds posted an average return of 0.9%.
Watson Wyatt covered 183 pension funds, including segregated, pooled and third pillar personal savings plans known as PPR/E’s, managed by 15 pension fund managers. The funds had a combined asset value of e12.4bn, representing 80% of the total Portuguese pension fund market.
*The release of the Mercer’s figures coincides with its latest pension fund report on the Portuguese market. Mercer said the report presents a “detailed profile of the market in Portugal and highlights participating managers and their performance achievements.”
It is available from October, with further details available at www.mercerIC.com.
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