The world's 300 largest pension funds recorded a 3 per cent fall in total assets in 2015, according to Willis Towers Watson.
In a research paper prepared in collaboration with Pensions and Investments, Willis Towers Watson noted the recent decline marks the first time assets in the top 300 funds have dropped since the beginning of the global financial crisis.
Willis Towers Watson senior investment analyst Paul Newfield said the data “bears testament to how difficult it has become for funds to meet their respective missions” in the current investment environment.
“Investment governance, beliefs, mission clarity – these are the key areas for any fund and we believe those funds which exhibit best practice attributes here will sow the seeds of longer term success for all their stakeholders,” he added.
Funds that do well share several attributes, according to Mr Newfield, becoming early adopters of innovation, with a similar approach to currency, and embracing diversification.
“There has been a fair amount of movement in the ranking in the past five years, with winners likely being determined by having fully diversified portfolios that perform well in times of stress and a focus on total rather than relative returns,” he said.
The 16 Australian funds listed in the top 300 climbed in ranking by an average 3 places, led by Hostplus, which climbed 11 spots, then Sunsuper and Cbus, which both rose 9 places, the research paper noted.
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