PORTUGAL – Portuguese pension funds returned a median +4.7% in the first half of 2003, according to a survey by Mercer Investment Consulting.

The upper quartile performance in the period was 5.1% while the lower quartile returned 4.0%. Mercer added that in the second quarter, the median return was 4.6%, with the upper quartile at 5.1% and the lower quartile at 3.7%.

The report shows that the funds reduced their allocation to bonds between the end of the first quarter and the end of the second quarter to 60.6% from 63.4%. Equity allocation rose to 23.1% from 18.9% in the same period. Cash levels fell to 5.8% from 7.4%.

In July, Watson Wyatt reported that Portuguese pension funds were net buyers of equities in the first quarter.

The new Mercer survey results are based on 188 pension funds with around 14 billion euros in assets, and with no investment restrictions.

Mercer has produced a report on Portugal’s pension fund market which will be available in October.