UK - Pension funds returned an unspectacular 1.1% for the second quarter, figures from performance measurement specialist the WM Company show.
Its survey, which covers more than two-thirds of the UK pension fund market, reveals that returns for the six months to the end of June were 2.6%.
WM Company said the second quarter returns - down from 1.5% last year - were driven primarily by the performance of equities. It said that European equities, which on average make up 9.1% of schemes’ portfolios, returned 3.8% for the quarter, while North American equities, which account for 8.7%of asset allocation, returned 2.9%.
UK equities continue to dominate schemes portfolios and the WM Company said that the average weighting to the asset class, which returned 2%, was 37%.
Japanese, Pacific ex-Japan and other international equities were down for the second quarter; however, the firm attributed this to currency weakness relative to sterling.
At the same time, schemes continued to move money out of equities and into fixed income, which has been hit due to fears that interest rates will rise.
While cash returned 2% for the quarter, UK bonds were down 1.2%, overseas bonds returned -0.8%, and index-linked gilts returned -0.4%.
The results mean that for the year to date, UK bond performance has been flat while returns from UK equities stand at 2.8%.
Property was the best performer during the second quarter, returning 4.9% and has the best performance record over three, five and 10 years.
WM senior consultant Graham Wood said: “In current market conditions it is proving difficult to find sources of incremental return. Pension funds continue to mark time as they wait for global markets to demonstrate a clear sense of direction.”
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