According to the report, assets for the 13 markets in the study were estimated at US $23.3 trillion at the end of 2009 – a 15% increase over the 2008 year-end value. Pension assets in the 13 markets – U.S., UK, Switzerland, South Africa, Netherlands, Japan, Ireland, Hong Kong, Germany, France, Canada, Brazil, and Australia – account for 70% of the GDP in these countries.
In 2009 pension assets rose in all the markets in the study in U.S. dollar terms; however, global pension assets are still below 2007 levels, the report says.
The study finds that during the last 10 years, DC assets have grown at a rate of 6.4% per annum, while DB assets have grown at a pace of 1.6% p.a. Currently, DC assets represent 42% of global pension assets, compared to 40% in 2004 and 32% in 1999.
The markets with larger proportions of DC assets are Australia, Switzerland, and the U.S., while Japan remains essentially 100% DB, according to the report. Canada is the only country in the study where DC assets have fallen compared to DB over the last 10 years.
At the end of 2009, the average global asset allocation of the seven largest markets was 54.4% equities, 26.9% bonds, 1.3% cash, and 17.4% other assets. The largest allocations to “risky” assets occur in the U.S., the UK, and Australia. More conservative asset strategies – more bonds and less equities – occur in the Netherlands, Switzerland, and Japan.
According to the report, the largest pension fund markets reported the main issues during the financial crisis as liquidity; the management of credit/collateral risk; asset manager underperformance; and new challenges in strategic asset allocation.The Global Pension Asset Study is here.