The 90 local government pension schemes in England and Wales achieved a 19.5% investment return for the year ended March 31, 2017, the latest annual report said.
The report, published by the LGPS Scheme Advisory Board, said that return compared to a 0.1% gain in 2016, "reflecting more favorable financial market conditions."
For the three years ended March 31, 2017, LGPS funds achieved an annualized return of 11.2%. Over a five-year period, the annualized investment return was 10.7%, and for the 10 years ended March 31, 2017, 7%.
The assets of these pension funds grew 21% over the year ended that date to £263 billion ($327.5 billion).
The average asset allocation for these pension funds was 62% bonds, up from 60% a year earlier. Equities allocations fell to 15% from 16% in 2016, and alternatives exposure grew to 10% from 9%.
Real estate assets grew to 8% of the average pension fund, down from 9%; cash allocations fell to 2% from 3%; and diversified growth assets exposure was flat at 3%.
The pension funds' latest triennial valuation as of March 31, 2016, showed a funding level of 85% across these LGPS funds. The previous triennial valuation, as of March 31, 2013, showed a funding level of 79%.