Equity exposure continues to drop in the UK with average allocations now at 61 percent, compared to 68 percent in 2003, according to a new survey by Mercer.
In contrast, there has not been a corresponding shift away from equities in Continental Europe. Exposure to active currency and tactical asset allocation is likely to increase this year as funds seek to diversify their risk.
Around 6 percent of UK funds now invest in hedge funds, compared with 9 percent in Continental Europe and Ireland. The structure of bond portfolios and associated benchmarks are increasingly being used as a risk management tool in Europe.
“While it appears that allocations to equities increased in Continental Europe, the difference can be explained by their strong performance rather than by positive decisions to allocate more to this asset class,” said Ralph Frank, European director of consulting at Mercer.