The exposure to equity investments of UK pension funds remains among the highest in Europe, despite market underperformance. According to data from the WM Company around 68% of pension fund assets were invested in equities at the end of 2001, only three points down the 71% registered at the end of 2000.
The exposure to UK equities, around 45% of total assets, still doubles the proportion invested in foreign stocks that attracted 22.6% of pension fund money at the end of last year. In this category, Europe ex-UK was the most attractive zone for UK investors, which invested 8.2% of their portfolios in this region, followed by North America with 6.4%, and Japan with almost 3% of total assets.
UK bonds account for 11% of pension fund portfolios, whereas other asset classes such as UK index-linked products and real estate investments represent around 7% and 6% of the total portfolio.
The best investment results during 2001 came from property investments, which returned 6.2%, followed by UK bonds with 3.2% and overseas bonds with returns of 2.4%.