Boots Walks Away From UK Equities

October 29, 2001 ( - Over the past 18 months, UK retailer Boots PLC has shifted its entire £2.3 billion ($3.31 billion) defined benefit portfolio away from equities and towards bonds in an effort to reduce market risk to participants.

In a letter informing its 72,000 participants of the changes, Boots management cited the need to ensure pension payments regardless of movements in the markets. The move was reported by the Wall Street Journal.

Further details concerning the change are expected to be revealed when the company releases its earnings results later this week.

The move, analysts said, is a significant strategy shift, and while in line with a general trend that has seen many UK pension funds making small moves to reposition their portfolios towards fixed income, the sheer volume of the move could signal a broader shift towards corporate bonds.

An accelerated sell-off by pension funds would put further pressure on an already weak market, given that pension funds account for almost a third of the London stock market.