After increasing by 15.1 per cent in 2017, the assets under management of the world’s 300 largest pension funds fell by 0.4 per cent in 2018, according to data from Willis Towers Watson’s Thinking Ahead Institute.

It found the 300 funds’ total assets under management was US$18 trillion for the year.

A tougher market environment in 2018 meant AUM growth paused, but the underlying trend remains one of growing pension markets worldwide,” said Bob Collie, head of research at the Thinking Ahead Group, in a press release. “The pace of change in the investment world is a challenge, and scale is a huge advantage in a lot of ways.”

Breaking down the numbers, the report found defined contribution assets increased by 5.1 per cent and defined benefit assets declined by 0.2 per cent in 2018.

Also, looking at 15 out of the top 20 funds’ annual reports, it found 11 funds highlighted the importance of sustainable and responsible investment.

“Many of the most interesting and important developments start with the largest funds, and as new investment ideas like the total portfolio approach and universal ownership gain traction in these organizations, they influence the whole market,” Collie said. “It’s particularly notable that a majority of the largest funds are now highlighting the importance of sustainability. [Environmental, social and governance] factors are now significant financial considerations. Beyond that, there’s also an evolving recognition of the role large investors play within society, and the responsibility that comes with it.”

Among the largest 20 pension funds globally, two Canadian plans made the list: the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan.

The research was conducted with Pensions and Investments.