Total assets of the world's 300 largest pension funds jumped 19% in 2003, according to the annual survey conducted by Pensions & Investments and Watson Wyatt Worldwide.
The assets of the P&I/Watson Wyatt 300 totaled $6.59 trillion last year, up from $5.53 trillion in 2002 and marking the first year that total has broken the $6 trillion barrier since 2000, when the combined assets of the largest 300 equaled $6.17 trillion.
Total assets for the largest 100 pension funds totaled $4.69 trillion last year, up from $3.8 trillion in 2002. The total assets of the top 20 funds rose 20% to $2.16 trillion, and funds ranked 51 to 150 also rose by 20% to $1.853 trillion. The total assets of the funds ranked 21-50 and 151-300 each rose 19% to $1.38 trillion and $1.19 trillion, respectively.
In contrast to the previous three years, strong equity markets in 2003 drove the increase in total assets. Last year, emerging markets equities returned 56.3%, U.S. equities returned 31.1% and European stocks skyrocketed 39.1%. Additionally, much like 2002, a weakening U.S. dollar also affected total assets. Last year, the euro gained 19.8% against the dollar, the yen gained 10.7%, and the pound gained a little less than 11%.
The percentage of total assets held by U.S. funds among the 300 continued to shrink. In 2003, the assets of U.S. funds comprised 52.6% of the total assets of the world's top 300 funds. That figure is down from 54.4% in 2002, 63% in 2001 and 66% in 2000, when the tech bubble was at its height. A key reason for that decrease, in addition to the weakening U.S. dollar, was that overseas pension plans are focusing on funding issues.
The total assets of U.S. funds in the top 300 equaled $3.47 trillion, up from $3 trillion in 2002 and $3.4 trillion in 2001.