Rothschild £26m portfolio used overweight cash position to gain returns of 7.3%
A 30% weighting in cash has helped J Rothschild's pension fund top the Caps survey of balanced pension portfolios for the second quarter.
The £26m portfolio, managed by GAM, was up 7.3% for the quarter and also had a half weighting in UK equities and was overweight in overseas investments.
The second best performer was Winterthur Life which showed returns of 3.4% while Orbitex Balanced Life fund came in third with returns of 2.8%.
While the Rothschild fund gained from its overweight cash position, returns available from equity markets during the second quarter were on the whole positive. The best performer was the Far East (ex Japan) index which produced an average gain of 8.9% in the three months to 31 June 2001.
The second best performer was the US, up 7%, while emerging markets returned 5.1%. UK equities produced a gain of 1.2% while UK smaller companies managed a rise of 2.4%.
Outside of equities, property returned 1.5% for the quarter, giving it a total gain of 3.2% for the first six months of the year. Long dated UK bonds were the worst performers with a fall of 4.3% for the quarter but standard UK bonds and international bonds also showed negative returns. Non gilts are becoming more popular largely because they have outperformed gilts: over the last 12 months they have returned 8.7% compared to 3.2% on the FTSE All-Stocks Gilts index.
Caps also looked at returns for the UK index. During the second quarter the FTSE All-Share returned 1.2%, and within this mid caps provided the best returns at 4.4%, although both large and small caps were also in positive territory.
By sector, general industrials was the clear winner with a gain of 8.1% while information technology struggled for the third consecutive quarter with a return of -19.4%. Value stocks outperformed growth with high yielding equities returning 5.4% over the quarter and with low yielding stocks losing 4.6% in value over the same period.
Aegon's Tactical Managed Fund was the worst performer with a drop of 1.5% for the most recent quarter. This fund had a relatively high weighting in North American, Japanese and European stocks and a lower than average proportion held in cash.
Within the Caps UK Equity standard category of pension funds the best performer in the second quarter was Equitable High Income. This portfolio, now managed by Clerical Medical, achieved growth of 6.3% for the quarter. Invesco's Exempt Trust came in second with growth of 4.6% while Dresdner's RCM Exempt fund was the third best performer with a return of 4.5%. The worst performer was the Gartmore's fund which dropped 2.8%. Investment Week 23 July 2001
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