UK – Performance measurement WM Co. says UK pension funds withdrew 4.5 billion pounds (6.7 billion euros) from UK equities in the first quarter.

“The pattern of increasing commitment to overseas equities, evident over recent years, continued in this first quarter,” WM said in a new quarterly survey. “The funds in the survey withdrew approximately 4.5 billion pounds from UK equities.”

It said that 1.8 billion pounds went to North America and one billion pounds went to Japan. “UK bonds were a beneficiary of the UK equity dis-investment and net sales from overseas bonds and UK index-linked.”

WM added that the average pension fund is now more than 20% larger than a year ago, with the average fund returning 1.5% in the first quarter.

“After this latest positive quarter, the average fund has grown by over 20% over the 12 months since the market lows of March 2003.”

"Pension funds continue to operate in difficult market conditions", said Graham Wood, a senior consultant at WM. "However as long-term investors they can exploit market opportunities to position themselves for the future and this has enabled them to maintain their forward momentum in the first quarter of 2004."

It said bond and equity returns in the quarter were around one percent in the quarter. “Property continued to show stable growth and was the leading major asset with a return of almost three percent.

If found that UK schemes continue to have around 65% of their assets in equities.

The survey covers more than two-thirds of the UK pension fund market. Edinburgh-based WM is past of Boston-based State Street Corp.