The National Association of Pension Funds have revealed that one in three pension schemes have reduced their exposure to equities during 2005.
Their recent survey showed that 30% of respondents had reduced the proportion of their portfolio invested in equities during the past 12 months, while 25% had increased their bond holdings. The average equity weightings in UK pension funds is 63% while mean bond allocation is 29%. Thirteen per cent of schemes have increased their investment in property, and 11% have upped their weightings to hedge funds and commodities.
Our view
Is this a sign that many think that UK equities have gone as far as they can for the time being.