GREENWICH, Conn. — Corporate and public pension funds increased their exposure to international equities about 20% last year, a new survey by Greenwich Associates Inc. shows.
Allocations to international stocks rose 2.2 percentage points in the year ended Oct. 31, climbing to 13.3% of total assets from 11.1% a year earlier.
The only other significant shift was in overall fixed income, where the allocation dropped 3.1 percentage points, to 23.7% of total assets last year.
Corporate pension executives surveyed expected international equities to outperform every strategy but hedge funds and private equity in 2004.
They predicted an 8.9% return for international stocks, vs. 9% for hedge funds, 11% for private equity and 8.3% for domestic equities.
"That's a difference of 60 basis points in return for international stocks vs. domestic stocks," said Rodger Smith, managing director with Greenwich.
But hedge funds, private equity and equity real estate stole the limelight when fund executives predicted in which asset classes they expect to make significant allocations over the next three years.