Why pension funds are not following rush to equities

PENSION FUNDS

Hannah Brenton looks at where pension funds will invest over the coming year, and why.

In their annual outlook briefings, asset managers predict equities will perform well over 2013, with particularly attractive valuations in European and emerging markets. They warn of a looming bubble in the “safe haven” government bond markets, while arguing investment grade corporate bonds are unlikely to replicate their 2012 performance. Yet for UK pension funds, do these predictions have any value? Since the financial crisis, schemes have scaled back their exposure to equities while increasing their government and corporate bond allocations to better match their liabilities. The...