The “cult of equity” is poised to become history for UK defined-benefit schemes, as the country’s pension fund managers move to favour corporate bonds and alternative investments, a new survey reveals.
More than a third of the UK pension schemes (41 per cent) that participated in Aon Hewitt’s Global Pension Risk Survey for 2013 expect to reduce their exposure to UK equities in the next 12 months, while more than a quarter (28 per cent) hope to pare back their allocations to global equities.
At the same time as equities are falling from grace, alternatives are gaining a following. One-third of participating UK pension funds hope to increase their exposure to alternatives. A similar percentage are accessing derivatives and raising their allocations to active strategies as well.