Pension funds continue to diversify asset investment

Pension funds are continuing to move their assets out of equities and into other investment classes, according to a survey from the National Association of Pension Funds (NAPF).

The survey received responses from 294 defined benefit funds with £450 billion in assets.

The percentage of all pension fund assets invested in equities has fallen from 59.7% in 2006 to 49.9% this year (UK equity investment has fallen from 28.2% to 21.1%). There has been an increase in fixed interest investments from 27.7% in 2006 to 31.2% in 2008.

David McCourt, NAPF Policy Adviser on Investment and Governance, said "The pattern of UK pension fund investment continues towards greater diversification as a means of better risk management and reducing the impact of significant volatility in world equity markets. If volatile equity markets persist it would be likely that this trend will continue in 2009."