Pension funds slip again as markets disappoint

Pension funds slipped again last month after a disappointing performance by several key stock markets.

The average managed fund lost 0.3 per cent of its value in August, trimming the 12-month performance to 18.6 per cent from 19.3 per cent at the end of July.

Canada Life/Setanta was the strongest performer last month, managing to grow the value of its fund by 0.6 per cent. It was one of only two fund managers to keep funds in the black in August, with Montgomery Oppenheim recording a 0.1 per cent gain, while Standard Life stood still.

Bank of Ireland Asset Management (BIAM) had another bad month, shedding 1.1 per cent of its value.

Surging oil prices and Hurricane Katrina took the wind out of global stock markets as most lost ground with the exception of London and Tokyo.

Over the year to date, Setanta was also the leader with a 14.5 per cent gain, well ahead of the group average of 12 per cent and the 13.1 per cent recorded by Eagle Star.

Hibernian's 10 per cent return propped up the table, just below the 10.1 per cent growth recorded by BIAM, which was also weakest over the 12-month period.

However, over longer periods more relevant to pension fund investment, BIAM performs better. It is by some way the best performing managed fund over the last five years with annual growth of 3.4 per cent compared to an industry average of 0.3 per cent and 2.1 per cent by second-placed Irish Life.

AIB Investment Managers (AIBIM) remains the weakest fund manager over a 10-year period, with a return on assets of just 8.3 per cent a year, just behind KBC Asset Management (KBCAM) 8.4 per cent.

The places are reversed in the five-year period where KBC has seen losses of 2.5 per cent a year compared to AIBIM's 1.6 per cent.

Over the 10-year term, Montgomery Oppenheim tops its rivals, with annual returns of 12.4 per cent. BIAM and Eagle Star come next with 10.4 per cent, ahead of the 9.7 per cent average.