Modest growth in pensions

IRISH pension funds enjoyed modest growth during July, a more balanced performance than the 10.7% which separated the top and bottom funds for the first six months of 2010.

The latest InVision survey of Irish pension funds by global HR services company Hewitt Associates showed a wide range of performances across the different funds. The Standard Life GARS fund is the top performing multi-asset fund, with a year to date performance of +6.5% through the end of June. The Friends First/F&C Diversified Growth is the poorest performing year to date, returning -4.2%.

However, Hewitt anticipates that the imminent figures for July will show that most funds enjoyed steady, modest growth. Global equities markets rose +1.69% and eurozone bonds increased by +1.34%. Funds with higher exposure to eurozone equities will benefit this month, as it was the best performing region with returns of +6.45%.

Hewitt’s Deborah Reidy said: “We recommend that investors consider multi-asset funds in place of traditional managed funds as in many cases these have superior risk/return profiles and access new asset classes not previously available to smaller DB schemes or DC schemes.

“However, the wide range in returns of multi-assets funds over the last several months highlights the importance of knowing the underlying investments of the funds on offer.”

The Hewitt Managed Fund Index shows that the average pension fund gained 2.2% in the month of July. Hewitt Associates will issue their full Multi-Asset Fund Survey for July later today.