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Pension Funds look elsewhere out of equities

Pension funds are continuing to move their assets out of equities and into other investment classes, according to the National Association of Pension Funds.

The latest annual survey from the NAPF shows that the percentage of all pension fund assets invested in equities has fallen from 59.7 per cent in 2006 to 49.9 per cent in 2008. In contrast there has been an increase in fixed interest investments from 27.7 per cent in 2006 to 31.2 per cent in 2008.

NAPF policy adviser on investment and governance David McCourt says: “The pattern of UK pension fund investment continues towards greater diversification as a means of better risk management and reducing the impact of significant volatility in world equity markets. If volatile equity markets persist it would be likely that this trend will continue in 2009”.

Other findings from the survey show that half of the respondents reported a reduction in their exposure to equities while only 3 per cent say that they have increased their investment in this asset class. However, 92 per cent of schemes continue to invest in UK equities.

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