LEEDS, England - Glasgow Investment Managers Ltd. ran the top performing U.K. pooled pension fund in 1994 for the second year in a row, according to the Combined Actuarial Performance Services Ltd., Leeds.
While the median return of multiasset funds (including property) was -5.2% last year, Glasgow Investment Managers turned in a stellar 5.4% return.
In comparison, the next best performers for 1994 were Edinburgh-based Scottish Equitable PLC's global fund, at 1.3%, and Morgan Grenfell Investment Management Ltd., London, at 1.1%.
The manager also is tops for the five-year period, returning 13.4% on a compound-annualized basis. Following are Morgan Grenfell, returning 11.8% and Zurich Life Assurance Co. Ltd., Portsmouth, at 11.4%. The median pooled fund returned 8.7% a year during that period.
David Williams, Glasgow's managing director, said outperformance last year came from a combination of asset allocation and stock selection. Last year, the pooled fund - which manages only (pounds) 3 million in assets - was roughly 40% weighted in U.K. small-capitalization stocks, compared with 7% for the Financial Times All-Shares index. Small-cap stocks performed much better than large-cap stocks last year.
Meanwhile, the manager had 40% in the larger-cap stocks, compared with 72% for the index. Also, the fund kept 10% in cash, which returned 4.9% last year, while it had nothing in bonds until last August. U.K. bonds lost 6.2% last year, with all of the losses occurring in the first half.
For the 10-year period, Britannia Investment Managers Ltd., Glasgow, returned an annualized 21.7% return, compared with 14.6% for second place Mercury Asset Management, London, and 14.5% for Confederation Life Insurance Co., Stevenage, England.
U.K. bonds were the best performing assets for the five-year period, with an annualized return of 11.2%, according to CAPS. The next best-performing asset was cash, at 9.8%, while U.K. equities returned 9.3%.
For the 10-year period, however, U.K. stocks remain on top, returning 14.3% a year, which buoyed the median pooled fund to 12.6%. In that time period, bonds returned 11.3%, overseas equities, 11.2% and cash, 10.7%. In other asset classes, property returned 9.6% and index-linked bonds, 8%.