Top pension funds accelerate AUM growth through 2017: Willis Towers Watson

Assets under management at the world’s largest pension funds not only grew faster through 2017 than the previous year, but also became more concentrated among the top 20 such funds, according to the latest Global 300 research from Willis Towers Watson’s Thinking Ahead Institute.

Total AUM of the 300 biggest pension funds jumped 15.1% to reach $18.1trn, a marked increased in the 6.1% rater of growth in AUM value through 2016.

The top 20 funds studied now account for 41.1% of the AUM total, up from 40.3% the previous year.

Among the other key trends noted include the continued advance of emerging markets based funds, with Employees’ Provident Fund (India) making the top 20, marking the fourth EM fund to make the top 20 in the past decade.

The research also highlights increased focus on governance as these vehicles for long term savings and investments are being buffeted by multiple factors such as demographic change, social expectations, politics, sustainability, regulation and technology.

Also notable: the assets of defined contribution funds increased faster, by 17.6%, than those of defined benefit funds, 13.5%. And DB assets as a share of the total fell, to 64.7% from 65.5% in 2016.

That noted, the research also suggests that there is resilience in DB, and that hybrid, rather than DC solutions may gain market share.

Sovereign and public sector pension funds account for 68.6% of the total assets, increasing by 0.2% from 2016.

By asset class, the top 20 funds have a weighting to equities, 46.3%, with fixed income behind at 36.1%, and alternatives and cash at 17.6%. However, there are regional differences, with the Asia Pacific funds largely allocated to fixed income, 52.5%, while North American funds were weighted to alternatives, 34.8%.

Click here to view the full report: PI-300_2017

Top 20 pension funds (US $ millions)
RankFundMarketTotal Assets
1Government Pension InvestmentJapan$1,443,554
2Government Pension FundNorway$1,063,456
3National PensionSouth Korea$582,938
4Federal Retirement ThriftUS$531,489
6National Social SecurityChina$456,853
7California Public EmployeesUS$336,684
8Canada PensionCanada$283,454
9Central Provident FundSingapore$269,133
11California State TeachersUS$216,193
12Local Government OfficialsJapan$209,880
13New York State CommonUS$201,263
14Employees Provident FundMalaysia$200,265
15New York City RetirementUS$189,794
16Florida State BoardUS$167,900
17Ontario TeachersCanada$150,730
18Texas TeachersUS$146,326
19Employees’ ProvidentIndia$134,272
20GEPFSouth Africa$133,944
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