Pension funds gain 0.8%

Pension funds recovered some ground in July after a disastrous second quarter that saw more than 4 per cent stripped from Irish retirement assets. Group managed pension funds recorded an average gain of 0.8 per cent last month, bringing the average gain so far in 2006 to 1.7 per cent.

Mercer Investment Consultants said that, while modest, the positive return for July was "welcome, given that equity markets struggled for much of the month, weighed down by concerns over the escalation of hostilities in the Middle East."

A small rally in markets towards the end of the month was sufficient to lift pension funds into positive territory.

Standard Life and Canada Life/ Setanta were the strongest performers in July, recording gains of 1.3 per cent, well ahead of the 0.4 per cent recorded by bottom of the table Hibernian Investment Managers (HIM) and KBC Asset Managers (KBCAM).

The 0.7 per cent monthly gain by Bank of Ireland Asset Management (BIAM) was not enough to offset earlier losses and it remains the only domestic group fund manager in the red for the year to date, with its assets having lost 0.2 per cent over the last seven months.

Hibernian is the strongest performer so far in 2006, with a 3 per cent overall gain, despite last month's relative weakness.

A strong performance by stock markets in 2005 means that the average pension fund manager is showing a return of 9.9 per cent on assets over the past 12 months. BIAM continues to lag its peers with Standard Life's 12.1 per cent leading the way.

Over five years, the effect of the bursting of the dotcom bubble continues to be felt, with returns averaging 3.9 per cent per annum, compared with a 13 per cent average over the three-year period.

Eagle Star, with an annual return of 5.3 per cent outperforms over the five-year timeframe with KBCAM at the other extremity seeing growth of just 1.7 per cent per annum.

Over the past decade, Oppenheim remains the market leader with 12.4 per cent growth per annum against an average of 9.7 per cent and just 8.4 per cent by AIB Investment Managers.