UK Pension Funds at 20 Year Lows

April 23, 2001 ( - So far, 2001 has been a brutal year for UK pension fund mangers, with returns languishing at levels not seen since 1974.

Numbers from performance measurement company CAPS, show returns for managers- flagship pooled mixed with property pension funds in negative territory for the fifth consecutive quarter, falling 7.2% in the first quarter of 2001.

Not surprisingly, value investors, underexposed to the TMT sector, performed best, with fund management group, Phillips & Drew at the top of a list of 69 funds, its managed exempt fund rising 5.2% and its life managed fund up 4.8%.

Those numbers stand in sharp contrast to the average flagship fund, which fell 10.3% in the year ending March 31, according to the Financial Times.

It was the only pension fund management group to record a positive return over the period, no doubt thanks to the group?s value-focused strategy. The firm has concentrated on investing in cheap or under-valued stocks, shying away from new economy stocks.

Another value manager, Bank of Ireland, found its way into the top three, recording a fall of 2.1%.

Bigger Not Better

The largest of the top ten, Standard Life, with £1.3bn under management, came in sixth, retreating -5.8% over the period, citing its underexposure to technology and increasingly heavy exposure to cyclicals and financials as the reason for its relative success.