PORTUGAL – European equities, with an average yield of 4.4%, were the biggest source of return for Portuguese funds in July, according to Watson Wyatt.

European ex-Portugal equities have yielded 15.7% in the first seven months of the year, the second-highest return after international equity. In July this asset class returned 2.9%. Portuguese equity, on average 13.5% of portfolios, returned 1.1%.

The three classes combined make up 29.2% of pension funds’ allocations.

The consulting firm explained the positive equity result saying that terrorist attacks and volatile oil prices had “limited negative impact on financial markets”, with various European and North American equity indices registering four-year year highs.

Hedge funds, which account for 2.6% of portfolios, returned 0.5% last month. Property investments came in at 0.4%.

Total returns for 2004 amounted to 7.4%.