UK - UK pension funds' posted modest returns in the third quarter with total asset returns up 2.2% for the period, according to results released by the WM Company - the European performance measurement arm of State Street.
According to WM’s quarterly pension fund survey – which covers more than two-thirds of the UK pension fund market – total asset returns on UK funds are up 4.9% for the year to date, with the highest returns coming from property, up by more than 11% for the year.
“The good news is that funds continue to make progress, albeit slowly,” said Graham Wood (pictured), senior consultant at the WM Company.
“Difficult market conditions are, however, making it tough to establish traction and a convincing sense of forward momentum.”
The WM Company said equity markets were mixed for the quarter, tempered by concerns over economic growth and corporate profitability as well as rising oil and commodity prices.
Gains in the smaller Pacific markets, up nearly 9%, were balanced by a drop of over 7% in Japanese equities, the company added.
“Overseas investment returns have been held back by the modest rise in sterling relative to the other major currencies,” the WM Company said.
“Asset allocation has changed a little over both the third quarter and the year to date – the asset split remains broadly 70% real (equity and property) and 30% monetary (bonds and cash). There is, however, an underlying theme of disinvestments from UK equity in favour of bonds, cash and to a lesser extent property.”
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