IRELAND - The average Irish pension managed fund rose 9.0% in the second quarter of the year, according to Mercer Investment Consulting.
Irish Life (+11.4%) and Acorn Life (+10.5%) were the best performing managers over the quarter, with Irish Life Global Access (+7.5%) the worst performer against an average return of +9.0%.
Irish Life (+5.4%) and Friends First/F&C (+4.6%) were the highest ranking funds year-to-date, outperforming an average return of +3.7%. The biggest underperformers over this period were KBC Asset Management and Standard Life returning +2.7% and +3.0% respectively.
Grainne Alexander, senior investment consultant at Mercer, said: Equity markets over the second quarter recovered strongly from the losses witnessed in the early months of the year, buoyed by the reasonably swift conclusion to the war in Iraq, further ECB and Federal Reserve interest rate cuts, as well as some signs of improving economic fundamentals.”
Equity markets posted positive returns across the board, with global markets gaining 11.6% over the three month period.
However, the strengthening euro impacted negatively on non-euro based asset returns over the quarter, with the euro appreciation eroding over a third of the local US equity gains over the quarter, added Alexander.
Despite the recent strong gains, medium term pension fund returns remain in negative territory, with the average managed fund down -0.5% a year over the last five years. New Ireland (+2.7%) is the top-performer over this period, closely followed by Montgomery Oppenheim (+2.6%), with AIB Asset Management (-2.6%) and Standard Life (-2.3%), the underperformers.
Alexander added: However, the longer-term nature of pension fund investment shows a somewhat more positive picture. Over the 10 year period, the declines over the past three years are over-shadowed by the strong double digit growth of the mid to late 1990's.”
The average return over this period is +8.8%, beating an inflation rate of 3.1%, providing some degree of reassurance to investors, said Alexander.
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