Almost 50% of National Association of Pension Fund (NAPF) defined benefit members have reduced their equities exposure within the past year.
A survey of more than 300 defined benefit (DB) pension schemes shows 47% have reduced their equities allocation while 34% have increased the proportion devoted to fixed interest investments.
A total of 55% of DB assets remain invested in equities, down from almost 60% in 2006. Members have invested 29% in fixed interest assets, up 3%, and 16% in alternatives and cash, also up 3%.
The proportion investing in hedge funds has risen from 8% to 17% since 2005 while the proportion of schemes investing in property has risen from 50% to 60% over the same period.
Joanne Segars, chief executive of NAPF, says: “With growing scrutiny and pressure on pension scheme trustees to make sure there is a balance between risk and return, the survey shows they are increasingly viewing diversification as normal practice.”
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