Pension funds recover from February crash

IRISH pension funds are experiencing mixed fortunes this year with most making up February’s losses in March, to deliver average growth of just 1.2% over the first three months of the year.

Irish pension managed funds were up an average of 0.9% in March, according to the latest figures released by Mercer Investment Consulting. While Rubicon Investment Consulting put the monthly increase at 1%.

AIB Investment Managers emerged as the best performer so far in 2007 with a return of 2.3%, according to both Rubicon and Mercer.

Bank of Ireland Investment Managers have fared worst, delivering a loss of 0.1% over the first three months of the year according to both consulting firms. New Ireland also made a return of -0.1% according to Mercer. It was not included in the Rubicon analysis.

Investment consultant with Mercer Anthony Corrigan, said that equity markets had a bumpy ride during the first quarter of the year.

“The rapid decline or correction at the end of February came about due to the tightening of financial controls in the Chinese economy and weak economic data in the US. Equities however bounced back to finish the quarter up 1.6% in an environment of increased volatility while bonds finished down 0.1% for the quarter,” he said.

Rubicon managing director Fiona Daly said that returns for the past 12 months were a respectable 8.5% on average, with individual returns ranging from a low 5.5% at Setanta Asset Management to a high of 11.1% at AIBIM.

Over the past three years, the average managed fund has shown a gain of 14% per annum, according to Rubicon and 13.7% according to Mercer’s tables.

For the five year period to the end of March, the average performance is a more modest 6.6% per annum according to Mercer, and 6.8% according to Rubicon.

Managed pension returns over the past 10 years, which include the impact of the bursting of the technology bubble in 2000 and the subsequent bear market, have been a healthy 9.2% per annum on average.

“The equity market turbulence experienced at the end of February continued into March. However, despite a volatile month, equity markets recovered most of the ground lost during the shockcorrection in February,” Ms Daly added.