Local authority pension funds in the UK achieved an investment return of -9% on UK equities in the year to 31 March 2001, marking one of the largest outperformances of the FTSE All Share index by local authorities.

UK performance measurer, WM Company, said the funds beat the index of UK companies by 2% - the most it had witnessed by local authorities. The investment returns support the view that active fund management is more likely to outperform the index when the market is falling, WM said. It also noted that local authorites are increasingly using more specialist investment managers, who seek higher outperformance than the traditional balanced managers.