Figures show Irish pension funds perform strongly in third quarter

THE last three months proved to be the best performing quarter for Irish pension funds in the last 10 years.

According to new figures, released yesterday by Dublin firm Rubicon Investment Consulting, pension funds showed positive returns – of 2.6% on average – for the seventh consecutive month in September.

For that month, alone, Irish Life Investment Managers’ funds performed best, showing a 3.1% return; with Friends First/F&C at the bottom of the monthly league table with a 2.1% return. All of the 10 funds showed positive returns for the month. The third quarter, as a whole, showed a combined average return of 11.8%; once again Irish Life leading the pack with a 14.7% rate of return. With a 10.6% return rate, Aviva Investors was the worst performing fund manager for the three months from July to the end of September.

For the year to date, meanwhile, the overall average rate of return amounted to 17.9%; Merrion Investment Managers topping the list. “In the nine months to the end of September, returns ranged from 26.1% (Merrion Investment Managers) to 11.6% (AIB Investment Managers), representing a difference of 14.5% between the best and worst performing managers so far this year,” Rubicon pointed out.

Regarding the wider picture, of three-year, five-year and 10-year performance, it added: “The averaged managed fund return has been a very disappointing -7.4% per annum over the past three years. However, the five-year returns to the end of September are once again positive on average, delivering a mean return of 1.5% per annum over this period.”

“Irish group pension managed fund returns over the past ten years have been a disappointing 1.4% per annum on average, well below the Irish inflation rate of 3% per annum over the same time horizon. Indeed, only Merrion Investment Managers outperformed inflation over this period, with a return of 4.1% per annum, while all the other fund managers – except KBC Asset Management – delivered positive returns over 10 years.”

The latest quarterly summary from Rubicon also noted that some investors who withdrew from equity markets at the end of last year – in an attempt to avoid stock market turbulence – could have missed out on the bounce markets have seen since last February.