Defined benefit pension schemes are cutting equities, increasing allocations to fixed income and diversifying into alternative asset classes, according to a survey from one of the UK's most influential shareholder bodies.

The proportion of defined benefit pension fund assets invested in equities fell from 61.1% in 2005 to 59.5% in 2006, the National Association of Pension Funds found in its 2006 annual survey. A third of schemes increased their investment in fixed interest assets during the period.