Aided by robust equity returns, pension funds in 12 countries posted a 14% weighted average return last year in U.S. dollar terms, according to a study by Wyatt Investment Consulting Inc., Washington.
Median returns of balanced portfolios (in local currency terms) ranged from a high of 91% in Malaysia to a low of 5.1% in Japan. Hong Kong pension funds ranked second with an average 53.3% rise.
According to Wyatt, Malaysian and Hong Kong funds got a boost from hefty weightings in their local, high-performing stock markets. Returns in other pension markets, were, in descending order, 35.2% by funds in the Philippines, 28.9% by those in Mexico, 28.8% in the United Kingdom, 26% in Australia, 21.4% in Canada, 17.8% in Spain, 16.4% in Switzerland and 14.2% in New Zealand.
U.S. funds ranked second from the last with a 11.3% return, while Japan's funds trailed with a 5.1% median return on balanced portfolios.
Although American funds fared rather poorly compared with those elsewhere, Wyatt said their performance on balanced portfolios still outperformed the Standard & Poor's 500 Stock Index, which gained 10.1% in 1993.
Funds in all surveyed countries except the United States increased investments in equities last year. In Malaysia, funds' equities holdings jumped to 62% of their assets from 27% the year before, Wyatt found.