UK pensions funds in the first quarter of 1997 had a 3.9% average re-turn, according to the WM Company.

But funds' UK equities investments, with a return of 4.6% underperformed the Footsie All Share in-dex, which rose 5.3%. The reason was that funds had a higher exposure to 'mid cap' stocks at the expense of the better performing larger companies in the FTSE 100, says WM. On overseas investment the overall re-turn at 5.2% outperformed the FT/ S&P World Index (ex UK). This was due to overweighting in European markets and would have been great-er if the sterling had not appreciated by nearly 5% relative to main European currencies, says WM.

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