U.K. defined benefit pension plans increased their active fixed-income allocations by 11 percentage points to 73% over the past 12 months, according to an Aug. 11 survey of 51 U.K. pension plans conducted by Fidelity International. U.K. pension plans are also focusing less on buying bonds to match liabilities and more on squeezing additional alpha from their bond portfolios, as an increased number of pension plans have given their bond managers the discretion to move into high yield and emerging markets bonds.
"Liability driven investment strategies are not as attractive to local authorities as some managers think," said Mark Miller, director of business development at Fidelity International. "It seems clear that ... (pension plans) will continue to focus on driving returns and achieving diversification rather than de-risking in the future."
