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Pension funds post 14 per cent return in 2009

Pension funds post 14 per cent return in 2009

Category: Pensions

Updated: 06/01/2010
First Published: 06/01/2010

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The average UK pension fund achieved a weighted average return of 14 per cent in 2009, almost entirely eradicating the heavy losses that were suffered in 2008.

Research conducted by BNY Mellon Asset Servicing found the average pension fund returned an estimated real return of 14.9 per cent against the Retail Price Index for 2009 and an estimated 12.8 per cent when measured against the National Average Earnings Index.

It is the strongest return from UK pension funds since 2005 and a notable improvement on 2008's figures of a weighted average return of -13.6 per cent.

"Following the worst annual return for over 30 years in 2008, pension funds clawed back most of those losses by the end of 2009, despite the poor start to the year," commented Alan Wilcock of BNY Mellon Asset Servicing.

Over 2009, UK equities posted a return of 30.1 per cent, with the strongest performance coming from emerging market equities, which recorded growth of 58.9 per cent.

Estimates found that UK pension funds also made gains over a three year period to the end of 2009, at a return of 1.7% per annum. However, over this period, pension funds failed to make gains against the Retail Price Index and the National Average Earnings Index.

Over a five year period, funds delivered a growth of 6.4 per cent, while pension schemes have recorded a weighted average return of 3.23 per cent.

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