Irish pension fund managers turned in their strongest performance of 2006 in August. Increased confidence in equity markets as the month progressed saw the average group pension managed fund grow by 2.8 per cent.

The buoyant monthly return lifted the industry's growth so far this year to 4.5 per cent - significantly ahead of the 1.8 per cent year-to-date performance at the end of July and the 1 per cent increase in average fund value over the first half of the year.

"Equity markets got off to a rocky start in August," said Fiona Daly, managing director of Rubicon Investment Consulting, as rising oil prices, concerns for the US economy and a surprise rise in UK interest rates hit sentiment.

" However, markets recovered strongly as the month progressed," she added, citing strong corporate earnings, better news on the oil front and the US decision to hold rates steady for the first time in 18 months.

"Combined with positive bond returns, pension funds enjoyed healthy returns in August," said Mercer investment analyst Anthony Corrigan.

KBC Asset Management, a longtime market underperformer, produced the best return in August along with New Ireland, increasing fund value by 3.2 per cent. Canada Life/Setanta, on the other hand, had by some way the poorest result with gains of 2 per cent last month.

So far this year, Hibernian's 5.7 per cent return tops its peers and is almost double that of laggard Bank of Ireland Asset Management (BIAM) on 2.9 per cent.

Over the last 12 months, Standard Life has recorded growth of 15.5 per cent, just ahead of AIB Investment Managers at 15.3 per cent and well ahead of a cluster of fund managers on 10.3 per cent and 10.4 per cent, again propped up by BIAM.

Over the longer term, which is of greater relevance in pension investment, Bank of Ireland performs better. Its 5.8 per cent gain each year over the past five years puts it ahead of the average and well clear of KBCAM's 3.5 per cent. However, it is still some way behind the 6.5 per cent annual return reported by Eagle Star.

Over 10 years, Oppenheim continues to outperform the market, recording 12.3 per cent growth per annum against an average of 9.8 and more than two full percentage points better than its nearest rival, BIAM, on 10.2 per cent. Canada Life/Setanta is the worst performer over this period among a number of companies with annual returns ranging from 8.5-8.7 per cent.