Stock market turbulence hits pension fund performance

THERE was an average rise of 0.2% in Irish Pension Managed Funds in June, according to figures released yesterday by Mercer Investment Consulting.

Hibernian Life, AIB Investment Managers Managed and AIBIM Multimanager were the best performing funds in June.

Hibernian also leads the table so far this year — returning 2.6%. Over the last three years, Irish Life has shown the best performance, with a return of 14.8% per annum, closely followed by Eagle Star, returning 14.7% per annum.

Bank of Ireland Asset Management and New Ireland were the poorer performers over this period, with returns of 11.7% and 11.9% per annum respectively.

“Stock markets remained weak for much of June, but a recovery was extended when the US Federal Reserve raised interest rates late in the month. The increase, to 5.25%, was accompanied by comments which indicated an easing of inflation pressures, which enabled stock markets to rally sharply,” according to Noel Collins, senior investment consultant with Mercer.

Looking at the 10-year figures, the average managed fund returned 9.2% per annum, comfortably exceeding inflation. New Ireland lead the way over this time horizon with a return of 10.4% per annum.

According to Rubicon Investment Consultants, which issued its Pension Managed Funds June summary yesterday, even though there was a slight recovery in equity markets last month, the poor performance seen in May dominated the returns achieved by pension funds during the second quarter of the year.

The relatively flat performance in June brought the average return for the second quarter down to -4.2%.