UK - Weightings to UK equity in domestic balanced pooled funds fell to an all-time low of 41.5% during the first quarter of this year, according to BNY Mellon Asset Servicing.

Poor relative performance and managers moving money away from the sector have caused the decline - the largest quarterly dip seen in the asset class for five years - BNY Mellon said today.

The median return for balanced pooled funds was -7.9% in the first quarter, the first negative return since the second quarter of 2006.  

"As a result, despite some stronger results in the previous three quarters, balanced fund performance was also negative over a on- year period, with the median fund returning -3.3%," the company said today.

The survey, which covered 76 fund managers with £419bn (€ 534bn) in pooled founds, found weightings fell also in overseas equities, particularly in Europe ex-UK and Pacific ex-Japan categories with a decrease of 0.7 and 0.6 percentage points respectively.

This was primarily because managers moved money away from these sectors, said BNY Mellon: "Money was moved into North American and emerging markets equities, although poor relative performance meant that, overall, weightings in these sectors decreased marginally."

The company added: "The biggest loss came from Pacific ex-Japan funds with a median return of -12.1%, a performance which did, however, beat the index by 1.3%.  All the other active overseas equity pooled funds within our universe failed to beat their respective benchmarks during the quarter."

Weightings in both cash and bonds were boosted, which increased cash weightings by 1.1%, as a result of both strong relative performance and manager movements into this sector.

Within bonds, weightings in the UK rose by 0.5% to 8.1% over the quarter and international bonds increased by 0.7% to 2.3%, though UK bond pooled fund managers returned -1.2% and underperformed the comparative market index by 2.6%.

Weightings in index-linked gilts remained fairly static over the quarter and there was no change to property weightings, despite some poor performances in recent periods for this sector.

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