UK DB funds will post 13% returns for 2010, says State Street
UK - Defined benefit schemes returned around 13% in 2010, with the equity market largely contributing to this recovery, according to State Street.
According to figures for the State Street Investment Analytics' (SSIA) UK Defined Benefit Pension Fund and UK Charity Fund universes, holdings in UK equities will have returned just below 15% since January 2009, while global equity returns varied depending on the region.
Jeanette Patrizi, vice president at SSIA, said that most schemes that maintained their investment strategy were rewarded as markets recovered.
"There was a general upward trend in the equity markets in 2010 although continued volatility often resulted in moves of 1% in a day."
Despite the sovereign debt concerns of the last year, some government bonds were rewarded, with UK gilts returning 8% and some index-linked returns rising as high as 12% due to uncertainty about inflation.
SSIA noted that while hedge fund and other alternatives offered strongly differentiating returns, the asset classes could post aggregate returns of 19% and 11% respectively.
However, continental European equities only offered growth of 6% for the year, trailing behind the UK, as well as North America, Japan and Asia Pacific, returning between 17% and 25%.