Pension funds switching to bonds despite falling returns

Pension funds have moved more than £40bn into fixed interest securities while returns from the asset...

Pension funds have moved more than £40bn into fixed interest securities while returns from the asset class are plummeting. The IMA's 2004 Annual Asset Management Survey shows that headline asset allocation in the industry has barely changed from 2003. Figures based on £1.1bn of UK assets under management show that 45.8% was invested in equities in June 2004, the same as the year before and 36.8% in bonds, a rise of 0.2%. But this disguises returns on securities between June 2003 and June 2004. Over this period the FTSE 100 and FTSE World indices have both risen 11% whereas yields on 10-y...