Best and worst: Managed pension funds

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The Independent Online
THE PERFORMANCE of Midland's managed pension fund was held back by its structure as, until 1992, a 'fund of funds', writes Caroline Merrell.

This means that the fund was invested in a number of unit trusts. In 1992 the bank took steps to try to improve its performance because it felt the inflexibility of the structure was having an effect on it.

The bank totally restructured the pounds 250m pension fund, taking it out of its unit trust structure and investing directly in equities. This also allowed the fund to take a bigger portion in fixed-interest securities.

At the moment the majority of the fund is invested in the UK, with smaller holdings in the US, fixed-interest securities and other countries including Japan and Asia. The fund is conservatively managed, but is reducing its holding in fixed-interest securities and deposits because of the poor returns.

The Skandia Perpetual managed fund invests in nine of Perpetual's unit trusts. The core holding is in the UK, with 10 per cent in Europe, 13 per cent in America, 10 per cent in Asia, 10 per cent in Japan and 7 per cent in cash.

The fund's bias towards the UK has been fairly consistent. The fund manager is now increasing the weighting in cash because of stock market uncertainty, and decreasing the weighting in Asia.

Zurich says it has a straightforward investment philosophy. Graham Exton, investment director, said: 'At the moment the fund is 95 per cent invested in UK equities.'

Provident Life and Windsor Life were unavailable for comment.

The best %

1 Century NEL Per Managed 87.50

2 Skandia Perpetual Managed 86.00

3 Britannic Managed 85.25

4 Zurich Life Managed 84.75

5 General Portfolio Perpetual 84.63

The worst

206 Skandia KB Managed 25.58

207 Midland EP Managed 24.50

208 Century Life Managed 20.67

209 Provident Life Gold S&F Mx Gr 16.33

210 Windsor Open Plan Managed 1.75

Figures are for performance over three years.

Source: Money Management.