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Russell/Mellon says UK funds rise 1.1% in Q1

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UK – Russell/Mellon says balanced pensio0n funds in the UK rose 1.1% in the first quarter.

“During the first quarter of 2004 pooled balanced funds achieved a median return of 1.1%,” the firm said. “This continues the recovery of 2003, when these funds returns 18.1% on average, the first positive return in four calendar years.”

“Based on the net median return, pooled balanced funds lost around 30% of their asset value over the three years to the end of 2002,” said Daniel Hall, Russell/Mellon’s publications and statistics manager. “Since then these funds have regained around half of that asset value.”

Performance was driven by positive returns in a number of key asset classes, Russell/Mellon said.

UK equities returned 0.6% while index-linked gilts were up 2.8%. Real estate was up 1.9% and UK bonds gained 1.4%. Cash gained 0.9%.

The data showed “another new high” for overseas equity weightings, the firm said, noting a rise to 30.8% from 30.1%. “This represented another new high since our records began in 1989.”

Meanwhile, the average UK equity weighting in balanced pooled funds fell by 0.7% to 52.4% during the first quarter – which Russell/Mellon said was “mainly due to managers moving money out of the sector”.

The pooled pension fund database covers 80 separate asset managers who manage more than 266 billion pounds in assets.

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