British pension funds increased their overseas equities investments to 27.9% of total assets as of Dec. 31, 2003, up from 25% a year earlier, according to a survey by WM Co. The survey reported that the allocation to U.K. equities remained about the same — 39.2% as of Dec. 31, versus 39.1% a year earlier. U.K. fixed income was at 12.1% compared with 12.3% on Dec. 31, 2002; while real estate was 6.4%, down from 7.3%; index-linked bonds were 8.7%, down from 9.6%; and overseas bonds were 2.6%, down from 3.9%. The remainder was in cash and in other investments.
Among larger U.K. plans, the overall equity allocation was 58% British equity and 42% international stocks as of Dec. 31, compared to 70% domestic and 30% overseas a year earlier.
Eric Lambert, head of performance and investment consultancy at WM, said there is a move towards a 50/50 split between U.K. and international equities, which he called an "unstoppable trend."