Pension fund investment values fall

PENSION fund managers saw the value of their investments fall an average of 2.6% in the third quarter of the year, investment consultants Mercer said yesterday.

Mercer’s survey of 25 global investment managers found only one managed to break even over the three months to September. Newton Investment Management added 0.8%, while KBC Asset Management propped up the table after registering a 5.2% decline over the same period.

Mercer Investment Consulting partner Tom Geraghty said struggling equity markets, coupled with outperforming bond markets, had resulted in a difficult time for pension funds. The FTSE World index, a benchmark for the performance of equity investments, gained 4.2% over the 12 months to October, but the 10-year yield on eurozone government bonds fell from 4.9% to 4.45%. “The end result is that this does little to help the financial position of many pension plans,” said Mr Geraghty.