Equity rally drives managed fund performances up
“Equity markets over the third quarter continued to rally, with particularly strong performance in both July and August,” said Gráinne Alexander, senior investment consultant with Mercer.
“More recently, equities came off sharply as a result of some negative news flow, including a fall in US consumer confidence figures and a surprise OPEC oil production cut. After strong gains in the market since the end of March, it was not too surprising that a pause in the upward momentum of stocks took place on some less positive news.”
Despite this setback, equity markets posted positive returns across the board, with the global market gaining 3.7% over the three month period.
“The good relative performance of equities is further emphasised by the flat performance from bonds over this period, with some fixed income markets recording marginal losses,” said Ms Alexander.
Acorn Life (+3.7%) and Irish Life Global Access (+3.1%) were the best performing managers over the quarter, with Canada Life/Setanta (+1.7%) and Hibernian (NU) (+2.0%) the worst performers against an average return of +2.7%.
Acorn Life (+8.3%) and Irish Life (+8.2%) were the highest ranking funds in the year-to-date, outperforming the average return of +6.3%. The biggest under-performers over this period were Hibernian (NU) (+5.6%), Hibernian Life and KBC Asset Management (both +5.7%).
With the recent equity gains, medium-term managed pension fund returns have moved back into positive territory.
The average managed fund has returned +2.5% p.a over the last five years, with Montgomery Oppenheim (+6.0% p.a.) and New Ireland (+5.8% p.a.) the best performers. AIBIM, returning 0.5%, was the under-performer.
“Over the 10 year period, the average return is +8.6% p.a, which comfortably exceeds the corresponding inflation rate of 3.1% p.a,” added Ms. Alexander.
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