Balanced investment management still rules the UK pension fund roost, despite a notable increase in the use of specialist managers in the last year, according to a survey of investment management arrangements by UK pension fund manager Phillips & Drew.
The survey shows that 78% of schemes use balanced portfolios, either as their principal investment approach, or in conjunction with specialist and internal management - a statistic which has remained steady over three years.
Indeed, schemes with under £100m in total assets have actually increased their use of balanced mandates, a factor attributed by the survey to the expense involved in using specialist, multi-manager structures.
The results, based on replies from 262 of the UK largest pension schemes, also revealed a rise of almost 10% in the number of schemes adopting a more specialist approach during 1997/98, shifting from 34% of funds to 42%.
However, 59% of schemes using specialists have not designated their tactical asset allocation to these managers.
DC schemes are also increasing in number in the UK, with the figure up to 18% in 1998 from 11% in 1997, with the most frequent catalyst for setting up a DC plan cited as the reduction and control of costs.