A poor market run has contributed to a small third quarter gain for pension funds.
According to Russell/Mellon pooled balanced funds returned 1.8%, albeit for a record sixth consecutive quarter.
Daniel Hall, Russell/Mellon’s publications and statistics manager says:
“Due to poor equity performance, pooled balanced funds lost around 30% of their asset value, on average, over the three years to 31 December 2002.”
Hall says while the levels of 1999 are a long way off, ‘continued positive performance means that these funds will have now regained over half of their lost asset value’.
The financial services company reveal pooled balanced managers continue to move money out of UK Equities, resulting in the average UK equity weighting falling from 52.0% to 51.3%, despite good relative performance.
This was the lowest recorded weighting for this sector since records were started in1989, Russell/Mellon say.
UK Equities achieved an index return of 2.9%, opposed to overseas equities fetching an overall negative return of –0.5% over the quarter.
Property provided the best overall return of 3.9%, while UK bonds (2.9%), overseas bonds (3.6%) and index-linked gilts (2.7%) all made gains. Cash returned 1.1% say Russell/Mellon.
The pooled pension fund database covers 77 separate asset managers who manage over £294bn in pooled funds, both balanced and specialist.IFAonline
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