Pension funds lost 2.1% in June

A SECOND successive month of losses has pushed Irish pension funds into negative territory for the year to date.

The average group pension managed fund lost 2.1 per cent in June. On top of average losses of 2.8 per cent in May, this was more than enough to offset earlier gains and push funds into the red for the first half. The average managed pension fund has now dropped 12.5 per cent in value since the start of the year.

The losses take no account of the pension levy which is being charged to funds, making the underlying situation even worse for occupational pension scheme members.

Funds shed between 1.8 and 2.5 per cent of their value last month, with AIB Investment Managers (AIBIM) the best performer in relative terms and Canada Life/Setanta the worst. Over the year to date, Merrion Investment Managers (formerly Oppenheim) has fared worst with a loss of 3.8 per cent. At the other extreme, although still in negative territory, Irish Life Investment Managers are just 0.1 per cent in the red.

Over the medium term, the outlook is little better with just two fund managers reporting positive annual returns over the period since June 2006.

The best of them, Zurich Life, has gained just 0.9 per cent per annum over that period. The average fund has lost 1.1 per cent of its value each year over the past five years, with Aviva Investors (formerly Hibernian Investment Managers) underperforming its peers with an average annual return of -2.9 per cent.

Zurich Life is the only manager to beat inflation over the past decade, with an average return of 2.7 per cent per annum. Over that longer term, Kleinwort Benson Investors is still reporting negative returns – on average losing 1 per cent of fund value per annum. AIBIM has reported no growth over that period.