Average Irish-managed pension fund shed 2.8% of its value in May

STOCK MARKETS lost ground again in May and that meant a return to losses for Irish pension funds. The average Irish-managed pension fund shed 2.8 per cent of its value over the month, reducing gains in 2010 to 3.8 per cent.

Mercer said European equity markets fell 5 per cent in May, with the Irish market faring much worse, losing 13.1 per cent. Bond markets – especially those in the peripheral EU states of Greece, Spain, Portugal and Ireland – also experienced volatile conditions.

Evelyn Ryder, director of investment consulting at Hewitt, said markets outside the euro zone “are still posting high single-digit or double-digit returns year to date”.

Irish Life Investment Managers (ILIM), with a loss last month of 3.9 per cent, fared twice as badly as the best performing fund manager Standard Life, which slipped by 1.9 per cent. Standard Life is also the standard bearer over the year to date and 12-month periods.

However, beyond that the picture remains grim, with average returns for the industry over the three-year period since June 2007 showing a loss on average of 8.8 per cent each year.

Four of the fund managers are nursing double-digit annual losses – with Aviva Investors (formerly Hibernian Investment Managers) and KBC Asset Management reporting a loss of 11.4 per cent each year. The best performer over the period, Eagle Star, was 5.6 per cent in the red each year.

Over the longer five- and 10-year terms, most managers are in profit, though by less than 1 per cent per annum on average – well below the rate of inflation.