Pension funds should trade in foreign exchange

Pension funds could add up to 2% to their performance by more specialised foreign currency management, according to a report from Mercer Investment Consulting and Record Currency Management.

The report also found pension funds were losing money as a result of underlying managers not trading foreign exchange competitively.

'In one case,' said Peter Wakefield, Record's director of portfolio strategy and consulting, 'only half the fund managers engaged by a particular pension scheme were trading for