U.K. defined benefit pension funds returned about 13% in 2010, down from about 15% in 2009, driven by strong domestic and international equities, according to two separate estimates released Wednesday.
In State Street Investment Analytics’ WM UK Defined Benefit Pension Fund Universe, the average estimated 2010 return was about 13%, down from 15%. In a separate estimate, BNY Mellon Asset Servicing put the weighted 2010 average return for a U.K. pension fund at 12.5%, down from 14.4% the previous year.
The State Street report said the return estimate was aided by U.K. equities, which returned an estimated 15% in 2010, and emerging markets equities, where returns were as high as 25% in some countries.
Public U.K. pension funds benefited from higher equity allocations and outperformed corporate plans, according to State Street.
Currency affected international returns in 2010, as the pound strengthened by about 4% against the euro but fell by 3% against the U.S. dollar and by 18% against the yen, according to State Street.
BNY Mellon said aggregate emerging markets equities returned 22.6% in 2010, while Asia ex-Japan equities returned 23.4%. U.K. equities returned 14.5% for the year.
U.K. and international bonds posted gains of 7.2% and 9.9%, respectively, for the year, while real estate returned an estimated 9.6%, according to BNY Mellon.