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Equities forgotten as UK schemes shift €58bn

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UK – Equities are becoming the “forgotten asset class” as UK pension schemes shifted £40bn (€58.3bn) out of stocks into bonds last year.

The Investment Management Association said its annual survey found that that UK pension scheme managers were moving out of equities and into bonds.

It said: “Matched samples for pension fund asset allocations from 2003 and 2004 indicate a fall in the proportion of equities from 60% to 56% - and a rise in bonds from 36% to 38%.

“Taking into account changes in asset values, IMA estimates that this represents a move of some £40bn into bonds.” The finding was consistent with the association’s estimate last year which predicted a move of £150bn over three to five years.

“UK equities, the star for so many years, now appear to be the forgotten asset class,” said Paul Yates, head of UBS Global Asset Management.

He said the many benefits of equity investing “seem to have been set aside as trustees search for value in areas such as private equity, hedge funds and property”.

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