Retirement Insight BUS FUND November 2013 Issue 39 | Page 4

Investment Report 2012 / 2013

Investment Report 2012 / 2013

Introduction by John Hattersley
Fund Director

Fund Account*

Much to many observers’ surprise, most
stockmarkets around the world went up during
2012/13 although the year was very much one
of contrasts with the first part suffering volatile
conditions whilst the last few months enjoyed a
rally. There was undoubtedly a change in sentiment
for the better over the year but much of that was
based upon the assumption that the central banks
would continue their support of financial markets. It
remains unclear what will happen when that support
is withdrawn or tempered.

would probably arise out of the March 2013
actuarial valuation and the changes to the LGPS
due to take place in 2014.

Whilst the Fund adopted a cautious approach
throughout the period it also acknowledged that
investors were becoming less nervous. The Fund
produced an actual return of 15.8% compared to
its expected benchmark return of 13.2%. All asset
classes performed well. There was little change to
the asset disposition over the year with international
equities and high yield bonds continuing to be
favoured whilst the Fund remained light in UK
equities and corporate bonds.

The environment remains very challenging in a
real sense since financial markets have been
propped up by symptomatic treatment rather than
by a cure. Whilst that is a legitimate cause for
worry it has to be acknowledged that money - and
the banks’ actions have created a lot of it - has
to go somewhere and equities are the least ugly
alternative. Investors have become more bullish and
will do so as long as markets rise. So long as the
desire for income, zero interest rates and money
printing continue equities are guarded by an open
door. In these circumstances the Fund will remain
vigilant and cautious and will try not to lose sight of
quality when the siren call urges otherwise.

As the Fund enters a period of considerable change
for the LGPS the investment environment remains
very challenging. Investors are aware that financial
markets are propped up by symptomatic treatment
rather than cures but remain relieved that the
patient is no longer in intensive care. Until such
time as the patient can be discharged the Fund will
remain vigilant and cautious.

The gentle pressure upon cash flows, induced
by pension requirements, continued and this was
carefully monitored: some trimming of positions
was required. The Committee is very conscious of
the closed nature of the Fund and began work to
anticipate the investment strategy issues which

10 Year Annualised Figures - Comparison with Benchmark
1 Yr Return

2011/2012

£’000

Fund Performance
16%

2012/2013
£’000

£’000

with members,
Dealings
employers and others
directly involved in
the Fund

Contributions receivable

3,076 - Employer
3,466

473 - Members
427
- Transfers in from other
50
pension funds

3,549

12%
10%
8%
3,943

Benefits payable
(7,068) - Pensions
(7,628)
(2,295) - Lump sums/commutations
(1,958)
(25) - Lump sum death benefits
(367)
(9,388) (9,953)

(53) Payments to and on
(66)
account of leavers

(183) Administration expenses
(156)
(9,624) (10,175)
(6,075) Net additions (withdrawals)
from dealings with members

(6,232)

on investments
Returns

4,759 Investment Income
5,039

11,667 Profit and losses on
21,535
disposal of investments
and changes in
value of investments

(37) Taxes on income
(28)

(511) Investment management
(504)
expenses

3 Yr Annualised Return 10 Yr Annualised Return

19,810

9.7 8.8

11.0 10.7

OVERSEAS EQUITIES 25.9 17.7

12.7 7.2

11.9 9.4

164,607 Net assets of the Fund 174,410
at 1 April

INDEX LINKED GILTS

10.8 10.7

12.8 12.1

8.1

174,410 Net assets of the Fund 194,220
at 31 March

CORPORATE BONDS 14.7 12.0

11.7 10.4

#

0.4

7.8

#
3.4

TOTAL RETURN

0.5
15.8 13.2

11.9 10.2

0%

1 3 5 10

Year
Return

Year
Annualised
Return

SYPTPF

Year
Annualised
Return

Year
Annualised
Return

Benchmark CPI

(Consumer
Price Index)

(South Yorkshire
Passenger Transport
Pension Fund)

Asset Allocation by Asset Class as at 31st March 2013

Net increase (decrease)
in the net assets
available for benefits

during the year

17.5 16.8

CASH

2%

9,803

UK EQUITIES

Fund Benchmark

6.3 5.2

4%

Asset Allocation

Fund Benchmark

PROPERTY UNIT TRUSTS
2.4 1.0

6%

15,878 Net return on 26,042
investments

CATEGORY

Fund Benchmark

14%

10.1 8.8

* extracted from
the audited
2012/2013
accounts

Property Unit
Trusts 4.6%
High Yield
Bonds
1.6%

Cash 0.5%

Corporate
Bonds 13.8%

UK Equities
16.3%

Index-Linked
Gilts 36.4%

International
Equities
26.8%

# not invested in this area for the entire period

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