Pension funds achieve best quarterly results in a decade

IRISH PENSIONS recorded their best quarter in a decade in the three months to September, according to figures released yesterday.

The average group pension managed fund increased in value by 11.8 per cent over the three months, as stock markets surged. The Irish Stock Exchange’s Iseq index recorded its best September on record, with a gain of more than 8.1 per cent.

The 23.7 per cent Irish stock market advance in the third quarter was the best three-month performance since the first quarter of 1998.

In September alone, funds reported average gains of 2.6 per cent, with Irish Life Investment Managers (ILIM) leading the way with a 3.1 per cent increase.

ILIM’s 14.7 per cent was also the best return over the third quarter compared to Aviva Investors’ 10.8 per cent.

To date in 2009, Irish pension funds have grown by 17.9 per cent, with seven successive months of gains more than offsetting a grim performance in January and February.

Since the end of February, funds have gained an average of 27.5 per cent, according to Fiona Daly, managing director at Rubicon Investment Consulting.

Merrion Investment Managers’s 26.1 per cent gain was well ahead of ILIM, at 22.7 per cent the only other fund to advance more than 20 per cent in the period, and nearly double the 13.9 per cent return reported by KBC Asset Management.

The hangover from the stock market collapse last year is evident in the 12-month figures, which still shows funds reporting an average loss of 1.1 per cent.

However, this disguises a wide breadth of performance – from the 4.3 per cent positive return at Merrion to the 7.7 per cent loss at AIB Investment Managers.

No manager shows up well over the three-year period where there is an average annual loss of 7.4 per cent.

However the recent rally has helped all except KBC Asset Managers to return to the black over the longer five and 10-year periods.

However, the average gain for funds over the past decade – at 1.4 per cent – continues to lag significantly behind the 3 per cent average per annum for inflation over the same period.