Pooled pension funds failed to beat inflation over the third quarter, with UK equities dragging down...
Pooled pension funds failed to beat inflation over the third quarter, with UK equities dragging down returns.
Over the period from July to September, balanced funds achieved a median return of 0.1% against the RPI's 0.3%, according to figures from BNY Mellon Asset Servicing.
However, performance over the previous three quarters means balanced funds still achieved a double-digit return of 11.5% over the year.
BNY Mellon's publications and statistics manager Daniel Hall said the credit crunch has hit UK equity performance, with the market falling 3.3% in July.
"During the third quarter, the majority of active-pooled fund managers failed to outperform their respective indices," he added.
"The only exceptions to this were property and Pacific ex-Japan managers."
UK equity managers achieved a median return of -2.6% during the quarter against -1.8% from the All-Share, and average weightings in the region fell to an all-time low of 44.7% by the end of the period.
Hall said this can be attributed to poor relative performance generally.
Despite manager movements away from the sector, weightings in Pacific ex-Japan equities increased to 6.2% as a result of strong relative performance.
Emerging market equities also benefited from strong returns, with weightings reaching an all-time high of 4.3% at the end of September.
Weightings in cash saw an increase of 1.1% as a result of managers moving money into this sector to avoid volatility elsewhere.
By contrast, property weightings dropped by 0.2% to 0.7% as money moved out, representing a new quarter-end low.
Managers in this sector struggled during Q3, returning -1.4%. This was the first time since the second quarter of 1995 that property failed to achieve a positive return.