EUROPE - UK pension managers are increasingly diversifying their assets to protect against market volatility, according to a new survey.

The research, carried out online by Baring Asset Management, found that 63.8% of respondents highlighted greater asset diversification as a key tactic in combating volatility, compared with 47.6% six months ago.

Just over half - 51.1% - of respondents also now review their investment portfolio more regularly, up from 42.9% in the last survey.

And 34%, up from 26.2%, are shifting asset allocations to multi-asset products.

More than two-thirds - 68.8% - now invest in targeted return or diversified growth strategies.

More than half the respondents - 54.2% - had recently changed investment managers, primarily because of underperformance.

When awarding a new mandate, risk management, transparency of the investment performance and investment performance itself were the main considerations.

Nearly two-thirds - 64.6% - had recently changed the allocation of their fund. The most common reasons for this were to reduce volatility (50%) and reduce the correlations of existing assets (42.3%).

The most common move - made by nearly four-fifths of those who had changed allocations - was to increase exposure to alternatives, including property. Just over one-third had decreased their exposure to equities.

Emerging Asia was the region investors expected to offer the biggest potential for equity gains over the next 10 years, although the number was down from 62% to 54.2%.

The biggest macroeconomic challenges to investment growth over the next six months continue to focus on European debt concerns, highlighted by 87.5% of respondents.

Other concerns include rising tensions in the Middle East (47.9%) and the prospect of a second banking crisis (41.7%).

The research was conducted from mid-April to mid-May with 99 investment managers of UK public and private pension schemes.