Around £40bn of pension fund assets was shifted from equities to bonds between 2003 and 2004, losing a potential £6bn in returns, even though listed stocks offered the best investment returns, says the IMA's annual survey.
Details of the members’ study – which analyses assets under management and allocations up to June 2004 from responses of 45 groups – reveals despite the rise in interest in equities, many pension funds made a gradual shift towards bonds to reduce the risk of potential losses to defined benefit funds, at the same time as the FTSE 100 (equities) index rose 11% year-on year between June 2003 and June 2004. According to the survey, the 133 members of the Investment Management Association managed £2.16 trillion in the UK and £7.87 trillion in 2004, however, pension fund assets account for 60%...
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