The average pension fund dropped in value by 10% last year, the worst performance for more than 10 y...
The average pension fund dropped in value by 10% last year, the worst performance for more than 10 years, according to figures from the WM Company.
The second consecutive year of negative returns saw falls in all equity markets, dragging annualised performance down dramatically.
Eric Lambert, executive director at the WM Company, said: 'Over the past 10 years, UK pension funds have produced a return of about 11% a year, although over the past five years the return has been 8%.'
The last time the average pension fund fell by double digits was in 1990, when losses ran at 11%. Property funds were the best performing asset class of all pension fund components with the average fund rising by 6.2%, with cash and UK bond pension funds showing returns of 3.6% and 3.2% respectively.
During the course of the year, pension fund managers increased their weightings to UK bonds to an estimated 11.3%, from 9.7% at then end of 2000. Holdings in UK equities fell to 48.3% from an estimated 45.5%.
Funds decreased their holdings in equities in every market apart from North American and Pacific ex Japan.
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