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Laxman Pai, Opalesque Asia: The value of global pension assets rose by 11 percent on aggregate to $55.7tn in 2023, said a study.
According to the Thinking Ahead Institute's (TAI) latest Global Pension Assets Study, the seven largest (P7) pension markets, in which 91% of assets ($50.8trn) are concentrated, defined contribution (DC) pensions make up a majority (58%) of assets.
The not-for-profit group founded by WTW measured the 'P22' (the largest 22 pension markets) and the 'P7' (Australia, Canada, Japan, the Netherlands, Switzerland, the UK, and the US) - finding that assets rose 11% from $50.1trn at the end of 2022.
The return to growth during 2023 is, in large part, the result of stronger capital market performance throughout the year, following a much more negative impact from markets in the correction of 2022. The TAI estimates that the (USD-measured) return for a reference portfolio of 60% global equities and 40% global bonds, stood at 16.6% in the twelve months to December 2023.
On a related note, actual investment allocations among global pension funds have shifted considerably over the 20-year history of the study. Since 2003, equity allocations have shrunk by nine percentage points over two decades, from 51% to stand at 42% in 2023.
Meanwhile, allocation to bonds among global pension funds remains stable at an average of 36% - the same in 2023 as in 2003.
Compared with 20 years ago, pension funds' asset allocation to "other" asset class...................... To view our full article Click here
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