CAPS data show pooled funds continue to struggle

UK – The UK’s pooled pension fund market again reported negative results for the second quarter of 2002, held down by negative returns in the equity markets, according to the latest Russell/Mellon CAPS survey of the UK’s pooled pension fund market. The balanced pooled fund median for the period was –8.7%. For the year to June 30, the median was –12%.

The report finds that all equity markets reported negative returns, with the US doing worst at –19.3%, followed by emerging markets, -14.5% and the UK, -11%. In addition, Europe ex-UK returned –9.5%, while Japan turned in the best performance with –0.5% in sterling terms.

The survey says positive returns in the bond markets gave some respite but not enough to keep the pooled market out the red. Overseas bonds did best, returning 4%, followed by UK bonds with 3.3%.

In line with the positive returns shown by the bond markets, the report finds that average equity weightings in balanced funds fell by 1.5% in the last quarter, whilst allocations to bonds increased. UK bond holdings increased from 8.2% to 9.2% whilst overseas bonds rose by O.2% to 5.1%.