Research

The world's largest pension funds - year ended 2017

Emerging market pension funds grow in prominence on world stage

September 2, 2018

Highlights

  • Assets under management of the world's largest pension funds totalled US$18.1 trillion in 2017.
  • Funds increased their value by 15.1% in 2017, compared to an increase of 6.1% in 2016.
  • Strong market returns for all major asset classes helped boost pension assets during the year. 

Willis Towers Watson Media
Click to enlarge

Source: Thinking Ahead Institute 

Willis Towers Watson Media
Click to enlarge

Source: Thinking Ahead Institute

 

Highlights continued

  • The top 20 funds experienced a higher increase than the overall ranking (17.4%), thus increasing their relative size to 41.1% of total assets.
  • North America remained the largest region in terms of AUM, accounting for 42.3% of all assets in the research.
  • Europe and Asia-Pacific AUM in the ranking represented 26.5% and 27.3% respectively.
  • North America experienced the largest annualized growth during the period 2012-2017 (6.2%).
  • Europe and Asia-Pacific showed annualised growth rates of 3.8% and 6.1% respectively over the same period.
  • The US accounted for 133 of the funds in the ranking. Since 2012, it has seen 9 of its funds drop out from the top 300, while 18 new funds joined the ranking.
  • Sovereign and public sector pension funds accounted for 68.6% of the total assets, with 144 funds in the top 300.
  • Defined benefit (DB) funds accounted for 64.7% of the total assets in the ranking. DB assets increased by 13.5% in 2017, compared to a 17.6% surge for defined contribution (DC) plans and reserve funds, and an increase of 15.1% for hybrids.*
  • On average, the top 20 funds invested approximately 42.1% of their assets in equities, 36.9% in fixed income securities and 21.0% in alternatives and cash.
  • North American funds have predominantly invested in equities while there was a higher preference for fixed income in Asia-Pacific funds.

*Note: Hybrid funds are plans that incorporate both DB and DC components. Reserve funds are set aside by a national government to guarantee pension payments in the future.  By definition, these funds are characterized by no explicit liabilities and are neither DB or DC.