There are, however, other good reasons for this move. In particular, UK pension funds have almost given up investing in the shares of UK companies now. In a little more than two decades such shares have fallen from half of portfolios to just 4% whilst holdings of bonds by such funds now exceeds 70% of their value. UK investors are just no longer interested in what UK companies, and companies more generally, do.
He’s measuring only defined benefit pensions funds. Near all of which are closed to new members, most of which are in run off. When a pension fund is only looking to pay out pensions, not save for them to be paid out in the future, then bonds are indeed a likely investment. Plus, obviously, the G Brown changes which forced them to do this.
From this oversight he then builds another one of his tosser theories:
Although, if I am candid, I think it more than that. They are no longer interested in equities because unlike the more ideologically driven US markets they have seen through what the modern company does.
No, because by looking only at defined benefit he’s completely missed the defined contribution funds which are the vast majority of pensions currently being built rather than pensions currently being paid out.
Yes, this man is indeed paid to be an economics professor at a British university.