PORTUGAL - Portuguese pension funds reported a 0.6% return in January 2006, a month marked by volatility, according to Watson Wyatt.
The firm said the compounding of SEMP’s average asset allocation as at the end of September 2005 with the corresponding indices’ monthly returns produced an expected average return of +0.6% (month on month).
Watson Wyatt said January had been a good month for pension funds, even despite oil’s 12% increase, triggered by the dispute between Russia and Ukraine over natural gas supplies, the stand-off between Iran and the international community over Iran's nuclear ambitions, the Hamas victory in the Palestinian elections, and the attacks on Nigerian oil refineries.
Main positive contributions came from equities, said the firm. These account for approximately 34% of the total portfolio. The domestic equity market was also found to have performed well, reaching a new four-year high.
Watson Wyatt said the month got off to a strong start when corporate results were released, but that stronger energy stocks and merger and acquisition activity were followed by a weaker end of the month.
Expected returns, non-annualised, for January 2006 were +0.6%.
Actual returns were 1.9% in Q1 for 2005, 2.5% in Q2 for 2005, and 2.9% for Q3 in 2005.
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