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COUNCILS WARY OF PENSION FUND INVESTMENT IN DERIVATIVES

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Local authority pension funds are wary of investing in financial derivatives - secondary instruments such as future...
Local authority pension funds are wary of investing in financial derivatives - secondary instruments such as futures, options and swaps - the Independent reports.

Although the derivatives market is gaining strength in the private sector investors, councils have not forgotten the Hammersmith and Fulham swaps fiasco in the 1980s, the Independent says.

Only 5% of council funds invest directly in derivatives and 49% expressly prohibit their use, according to a new report by Greenwich Associates. This compares with 19% and 34% respectively for all funds.
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