Asset allocation was back at the forefront of pension funds' thinking in 2004. It was rated the top concern by 200 European pension funds that took part in the Pension Fund Barometer, a survey conducted by Financial News and State Street. The funds also saw more frequent asset allocation as the most likely factor to improve their returns.

Mike O'Brien, managing director at Barclays Global Investors, said: "All aspects of asset allocation are experiencing a sea change in how they are perceived."