UK - UK pension funds are continuing to shift their equity investments away from domestic holdings to international shares, the latest Purple Book published by the Pension Protection Fund (PPF) has revealed.
The annual publication, compiled together with the UK Pensions Regulator (TPR), showed that looking at overall equity portfolios, UK schemes' exposure to the domestic market fell by 4 percentage points to 40.1%, with the percentage of equity investments in overseas companies rising marginally to 55.3%.
Most of the funds diverted away from UK equity were transferred to unlisted shares, with schemes more than doubling their exposure to 4.4%.
However, while schemes were shifting their equity investments away from the domestic market, the trend away from the stock market to bonds continued, with equity dropping by 4 percentage points to 42%, only marginally ahead of the 40% of total asstes invested in the bond market.
Meanwhile, the PPF also announced funding figures for October, revealing the 6,653 schemes covered by the PPF now have an overall surplus of £13.5bn, up from September's shortfall of £20bn.
Additionally, the average scheme funding ratio increased to 101.4%, with the number of schemes posting a deficit down by almost 300 compared with the previous month's figures.
Finally, the PPF has updated its statement of investment principles to allow the use of bond repurchases, as well as securities lending, in its investment strategy.
The changes, which the PPF insists do not change its risk-adverse investment approach, mean it is now able to invest in assets ranging from cash through to interest rate and inflation swaps and even sterling bond repurchase agreements.