UK – UK pooled balanced pension funds’ median returns for the first quarter were –4.4%, according to research from Russell/Mellon CAPS.
The returns are marginally worse than those reported by HSBC Actuaries and Consultants Ltd. yesterday. HSBC said the average UK balanced pooled fund manager achieved returns of –4.3% for the first quarter.
Russell/Mellon CAPS attributed the negative returns to further falls in the global equity markets, although there was strong relative performance in the equity sectors among some funds.
Active managers in UK equities generally beat the FTSE All-Share index the first quarter. Median return after fees was –6.6% against the index return of -7.2%. Pooled UK smaller companies managers were more successful, returning –7.6% for the first quarter compared to the FTSE SmallCap index return of –9.0%.
Managers underperformed in overseas equities due to their higher weightings in Europe and lower weightings in North America, according to the research. However, active managers outperformed their respective indices in the North American, European ex UK, pan European, Japanese and emerging market equity sub-sections.
As a result of equity performance, average overall equity weighting in balanced pooled funds fell this quarter to 78% as holdings in cash increased. UK fixed interest rose by 0.2% to 10.5%. Overseas bonds saw their weighting fall, but overseas equity weighting rose by 1%. UK equity weighting represented a newly recorded low at 51.3%.
Russell/Mellon CAPS provides institutional investment information services and systems across Europe. Its pooled pension fund database covers 82 asset managers who manage over 195 billion in pooled funds, both balanced and specialist.