Schemes invested heavily in fixed income assets – including government, corporate and overseas bonds – last quarter. Anticipated rate rises, schemes derisking out of equities and even switching from synthetic to real gilt holdings have all been investment drivers.
Data released by the Office for National Statistics show investment in gilts, including index-linked gilts, remained high in the second quarter of this year, with schemes ploughing £8.3bn into the asset class. Following a strong Q1 when £7.9bn was allocated the Q2 figure is the largest since this series of data began in 1963.
Schemes invested more than £6bn in non-indexed gilts of varying maturities, up from £2.7bn in the first quarter of the year. However, investment in index-linked bonds was down, with slightly more than £2bn invested, compared with more than £5bn in Q1.
Schemes also increased investment in corporate bonds, with almost £900m invested in UK corporate bonds and more than £2bn in overseas assets.
Data released by the Office for National Statistics show investment in gilts, including index-linked gilts, remained high in the second quarter of this year, with schemes ploughing £8.3bn into the asset class. Following a strong Q1, when £7.9bn was allocated, the Q2 figure is the largest since this series of data began in 1963.
Schemes invested more than £6bn in non-indexed gilts of varying maturities, up from £2.7bn in the first quarter of the year. However, investment in index-linked bonds was down, with slightly more than £2bn invested, compared with more than £5bn in Q1.
Schemes also increased investment in corporate bonds, with almost £900m invested in UK corporate bonds and more than £2bn in overseas assets.
There was also a seeming flight out of both UK and overseas equities in Q2, with outflows from UK equities amounting to £3.7bn – the biggest outflow since the last quarter of 2011. Overseas equities were also in negative territory with divestments of £1.4bn.
The first three months of this year saw the highest investment in short-term assets (£6.7bn) since the beginning of 2011 (£8.4bn). In Q2, short-term assets still had high inflows at more than £4bn. This may indicate some schemes are entering cash flow-negative territory.
