EUROPE - Continental European pension funds were net buyers of equities in 2002, opting to weather heavy market falls contrary to popular belief.
In the latest European Institutional Asset Management from Amvescap-owned Invesco, the Anglo-American fund manager, equity weightings decreased only slightly last year among institutional investors, to 24% from 26%.
Invesco polled 187 insurance companies, banks and foundations and pension funds from France, Germany, Italy, Benelux and the UK representing around e935bn in combined assets.
Jean-Baptiste de Franssu, chief executive officer of Invesco Continental Europe, said: “Overall in 2002, institutional investors generally maintained their long-term strategies and diversified their portfolios towards higher yielding bonds and the increased interest in enhanced index management.”
Fixed income weightings rose to 54% from 49% during the previous year.
Planned asset allocation changes in 2003 revealed a preference for investment grade corporates followed by high yield corporates and emerging market bonds.
And real estate and other alternative investments, including hedge funds, slid from 10% to 9%.
Overall uncertainty also persuaded investors to sit on a high level of cash at the end of 2002 at 13%, up by 1% from 2001.
The survey also suggests that the past three difficult years have encouraged investors to focus more strongly on long-term investment strategies. Most respondents have lengthened their outlook over the past four years, with 33% saying that their current horizon was 5-10%.
The most popular equity styles were expected to be value, core and enhanced segragated styles, respectively.
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