Strengthening financial markets throughout March enabled Spanish occupational pension funds to achieve positive returns for the month, according to figures from Mercer’s Pension Investment Performance Service (PIPS).The average return for the month was 1.1%, the biggest – 2.4% – coming from non-EU equity portfolios.EU equity portfolios returned 2.1%, fixed income 0.3%.However, this did not compensate for the turbulence in the second half of 2015 and the first two months of this year. Across all asset classes, returns for the first quarter of 2016 were -0.4%, with EU equities returning -7.6% and non-EU equities -3.5%.Fixed income portfolios, however, made gains of 1.5%.The PIPS survey covers a large sample of Spanish pension funds, most of them occupational schemes.Over the 12 months to end-March 2016, fixed income returned exactly 0.0%, while EU equities returned -15.4% and non-EU equities -9.3%.Xavier Bellavista, principal at Mercer, said: “The quarter has seen volatile performances, especially in equity markets. EU equity assets had the worst negative performance, but non-EU equity assets also posted negative returns, especially because of the performance of non-EU currencies.”He added: “Fixed income assets are also increasing in volatility and have incurred a negative performance for some months.“EU fixed income assets made positive returns for the quarter to end-March, but lower returns are now expected because fixed income indices posted a negative performance during April.”Bellavista said non-EU fixed income assets had been affected by the negative performance of some emerging fixed income assets, and also by the depreciation in non-EU currencies.Meanwhile, according to Spain’s Investment and Pension Fund Association (INVERCO), occupational pension funds returned -3.33% for the 12 months to 31 March 2016. Average annualised returns for Spanish occupational funds were 4.66% for the three years to 31 March 2016, and 4.67% for the five years to that date.As at the end of March 2016, total assets under management for the occupational pensions sector stood at €35bn, a decrease of 3.4% over the past year.Total pension assets, including those in individual plans, now amount to €103.1bn, while the number of participants in the occupational system remains stable, at just over 2m.According to INVERCO, the gradual shift away from domestic assets continues, with an average 60.6% of portfolios now invested domestically, compared with 61.4% at end-December 2015.Non-domestic assets made up 22% of portfolios as at the same date, with the balance in cash and technical provisions.Fixed income investments make up 57.3% of portfolios, barely unchanged over three months.The biggest single component of pension fund portfolios – 32.3% – is still invested in Spanish government bonds, with a further 16.3% in Spanish corporate bonds.Bellavista highlighted what he considered to be the most significant change in asset allocation in corporate pension funds in the past 15 years – the increased allocation to non-EU fixed income assets.“Historically, this allocation was close to zero,” he said. “But, in the past three to four years, it has increased to around 6% of corporate pension fund portfolios.”Over the past couple of years, he added, Spanish pension fund managers have been increasing the duration of fixed income portfolios in response to the extremely low interest-rate environment.The average duration of corporate pension funds rose from 3.5 years at end-2013 to 4.5 years at end-2015.Meanwhile, an average 21.2% of portfolios is invested in equities, down by 1.4 percentage points since end-December, according to INVERCO.The category of ‘other investments’ – real estate and alternatives, almost all invested domestically – has increased from 3.6% at end-December 2015 to 4%, more than double the percentage in December 2011.
By Frank PingueNEW YORK (Reuters) – There will be no shortage of big-name players in action when the U.S. Open tennis begins today but the talk around New York for days has centred around the marquee matchup between Serena Williams and Maria Sharapova.Williams and Sharapova – for years the two most recognisable names in women’s tennis – will open the evening session at Arthur Ashe Stadium with their first-ever New York meeting in a match that may just have the feel of a championship final.“Of course I’m going to watch it,” defending U.S. Open champion Naomi Osaka told reporters. “I know you all are going to watch it. I think everyone in New York is going to watch it.“At every Grand Slam there is always some sort of drama. You know what I mean? Like a first round. Like, Oh, my God. So this match just happens to be that for this tournament.”Eighth seed Williams, who is seeking a record-tying 24th career Grand Slam title, owns a commanding 19-2 career record against Sharapova, who last beat the American in 2004 and has fallen to 87th in the rankings amid an injury-hit 2019 season.“Definitely. That’s going to be a match to watch,” said Canadian teenager Bianca Andreescu, who is seeded 15th and plays her first match on Tuesday.Among the other top names in action on Day One of the year’s final Grand Slam are defending champion Novak Djokovic, five-times winner Roger Federer, Australian world number two Ash Barty and Venus Williams.While that talented group will surely draw plenty of attention, the anticipation for their respective matches will pale in comparison to the Williams-Sharapova matchup.Williams and Sharapova have not played each other since the 2016 Australian Open. They were set to meet last year at the French Open but Williams withdrew injured moments before their fourth-round match.While five-times Grand Slam champion Sharapova may be far from her top form, she could still present a challenge for Williams, who has not competed since retiring from the Toronto final against Andreescu with back spasms.And while their clash is highly anticipated, not everyone in the tennis world is planning their day around the match.“There are a lot of other quality first rounds. It’s not the only first round in the draw,” said French Open champion Barty, who kicks off the action at Arthur Ashe Stadium against Zarina Diyas of Kazakhstan.“I think more importantly I’m focused on my first round on Monday, and that’s all I’m worried about for the moment.”