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Portugal underperforms

The Portuguese pension fund industry underperformed in 1999, according to the SEMP investment performance survey by consultants Watson Wyatt.
The 1999 median performance of Portuguese segregated funds under balanced management was 7.4% This annual figure was boosted by the last quarter ‘results. "If you compared these figures to the results of other European markets, you can say that they are quite bad," says Carlos Ravara, investment consultant at Watson Wyatt in Lisbon. "But the last quarter performance was actually very good and most of the managers and fund sponsors are glad that the market did well after months of negative results."
According to Ravara, the underperformance of the Portuguese stock and bond markets during the first three quarters of 1999, the lack of foreign diversification in pension fund portfolios and the legal barriers restricting investments, were the main reasons behind these poor results.
The recovery experienced during the last quarter of the year meant the domestic equity returned 21.3%, bringing the total annual results for this asset class to 10.2%. The domestic bond market showed a decrease over the year of –3.4%. The survey covered 186 pension funds. Paula Garrido

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