IRELAND - Irish pension funds have continued to suffer from the credit crisis with poor progress made over the first eight months of 2007, according to new data.
Rubicon Investment Consulting said that among the ten main managed fund providers, returns during August ranged from -1.3%, produced by Bank of Ireland Asset Management, and 0.1% achieved by Setanta Asset Management.
As a result, the average fund rose just 1.3%, said the firm.
During the first eight months of the year, AIB Investment Managers were the best performing managers, with a return of 3.2%.
Bank of Ireland Asset Management languished at the bottom of the table with a return of -1.5%. On average, returns for the past twelve months among Irish pension providers were 9.4%
In terms of the implications of the results, Rubicon Investment Consulting said pension funds were feeling the impact of their overweight position in the Irish equity market.
Irish equities represented approximately 17% of assets in the managed funds included in the survey. This is equivalent to over 20% of the funds’ equity portfolios, whereas the Irish stock market represents just 0.3% of the world market.
Steven Harford, director of Rubicon Investment Consulting, agreed that Irish pension funds were hurting because of the sub-prime problems and interest rate increases, leading to a correction.
He said: “If you have a high weighting in Irish equities it is a double-edged sword because there are few big companies in the sector. In the Irish market, a lot depends on the financials, the construction sector and the housing sector.”
He added that over the last few months there has been a move to bonds as they are considered a safe haven.
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