With global investment banks predicting a lackluster 2019 for financial market returns, you might expect the guardians of pension assets to chase performance either by seeking the alpha promised by hedge funds or warming to Brexit-beaten U.K. stocks. You’d be wrong on both counts.

Amundi SA, Europe’s biggest fund manager, teamed up with CREATE-Research to survey pension managers across the European Union. The poll, published this week, covered 149 plans overseeing 1.89 trillion euros ($2.15 trillion).

Asked which investments they anticipate will deliver their targeted returns in the next three years, the funds overwhelmingly favored global equities, which were selected by 64 percent of respondents. Infrastructure, which has gained in popularity in recent years, came second and was chosen by 58 percent. So how did hedge funds fare in the beauty parade?

They were selected by just 3 percent of the survey participants, putting them 23rd out of 25 asset classes. Only currencies and gold garnered less support from the pension managers.

That’s a pretty damning indictment of the industry’s collective efforts to convince investors that it offers value for the higher fees charged. Unfortunately, that skepticism looks entirely justified.

Absent a December rebound, the portfolios are poised to deliver negative returns for the year as a whole, according to an index compiled by Hedge Fund Research. That will mark the 10th consecutive year when pension managers would have been better off investing directly in the S&P 500 index. So as the steward of retirement nest-eggs, why would you consider allocating any of them to the hedge-fund crowd?

The survey sponsored by Amundi, which oversees 1.5 trillion euros, also makes bleak reading for anyone anticipating an end to the dismal performance of U.K. stocks, which have lagged their peers in recent months.

Just 5 percent of the retirement funds in the survey put the U.K. among markets that will deliver the best returns in the next three years, ranking alongside Latin America and beating only Canada. The study notes that uncertainty concerning how Brexit will be resolved means “the economy will remain sluggish and fragile.”

With figures released on Wednesday showing growth in the U.K. services industry slowed to its weakest since after the Brexit referendum in 2016, the economy risks contracting in the fourth quarter. That’s not a bullish backdrop for British firms that depend upon domestic demand for their revenue.

So what are pension funds buying? With quantitative easing distorting the debt market, hard assets are increasingly being used as a surrogate for government bonds. “It is widely believed that the traditional 60:40 equity-bond portfolio will not meet return targets,” the report says. The survey found that 62 percent of those polled are investing in real assets, mostly property and infrastructure, to bolster performance in what’s anticipated to be a low-return climate.

And that may prove fatal to the likelihood of hedge funds coming back into fashion. As I argued earlier this week, the biggest risk facing the industry in the coming year is becalmed markets making it more difficult for active managers to generate alpha. Unless there’s a swift turnaround in performance, pension plans will continue to snub them – and they’re right to do so.

To contact the author of this story: Mark Gilbert at magilbert@bloomberg.net

To contact the editor responsible for this story: Jennifer Ryan at jryan13@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”

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