UK - The average UK pension fund rose by 3.6% in the third quarter of 2003 – taking the total return for the year to date to 10.3% - says performance measurement firm WM Co.

"The fragile veneer of UK pension fund confidence continues to firm up as the average UK pension fund achieved a return of 3.6% for the latest quarter to end September," said WM consultant Graham Wood.

He said it remained to be seen whether the return would "satisfy industry expectations".

"Further positive returns in quarter four and beyond will be required to see the shorter term returns, (three years) head back into the black but this is as good a first nine months of the year as we have seen for some time. Longer term periods in excess of five years are beginning to show a recovery."

WM, part of State Street, said the better results were "already feeding through into FRS17 deficit positions as funds take the opportunity to commission revised estimates in between triennial valuations".

It also said that asset allocation continued last quarter's trend towards equities, with a one percent increase in the asset class. "This shift is attributable in the main to relative market movements. Cash flows do not make a material difference."