U.K. pension plan returns in 2006 averaged from 8.8% to 10% as the strength of the pound dented investment returns from foreign markets, according to two separate estimates.
Mellon Analytical Solutions estimated average returns to be 8.8% from its sample of 507 funds with a total market value of %A3;200 billion ($390 billion). Meanwhile, WM Performance Services reported an average return of 10% among its database of 250 U.K. plans with total assets of %A3;450 billion.
Asset allocation among U.K. plans was little changed during 2006, with the equity weighting of 64% down one percentage point from 2005, according to WM. Exposure to alternatives and property were each one percentage point higher than in 2005, at 3% and 8%, respectively. Bonds were stable at 15%.