UK – UK pensions fund performance for the year 2002 was down 11.3%, signalling a third consecutive year of negative performance, according to Russell/Mellon CAPS, a European provider of institutional investment information services and systems.

Over the three years to 31 December 2002, funds returned an estimated –7.1% per year, representing the worst period of returns since the mid-1970s says Russell/Mellon CAPS.

Poor global equity market performance is blamed for the negative returns in 2002, with US and Europe ex-UK equities being the worst performers, returning –29.9% and –27.4% respectively. In the UK negative returns of –22.7% were posted.

Fixed income sectors provided the best returns last year, posting 9.3% in the UK. The asset classes of index-linked securities, property and cash also posted positive returns.

Over the longer term, however, pensions funds still managed to achieve positive returns. Over a five-year period, funds achieved 1.8% per annum, and over ten years, 7.5% per annum.

Russell/Mellon CAPS’ pension fund performance analysis will be available in greater detail in March.