Irish pension funds recorded their biggest monthly fall since 2002 in January and have now lost almost 10 per cent in value over the past 12 months.

The average fall of 6.7 per cent experienced by the funds last month came on top of a decline of 2.6 per cent in 2007.

Concerns over the US sub-prime mortgage market, tight credit conditions and worries over the global implications of a wider US economic slowdown all contributed to exceptional volatility in the global equity markets, according to Rubicon Investment Consulting which compiled the figures.

Volatility in European markets was exacerbated by the closing out by French bank Société Générale of a €50 billion unauthorised trading position created by one trader. European equities posted their largest single-day loss since September 11th, 2001 followed by the largest single day gain since March 2003 on Thursday 24th.

Setanta Asset Management was the best performing manager in January, limiting its losses to 5.2 per cent. The next best performer was Oppenheim Investment Managers who reported a fall of 5.3 per cent.

The worst performing manager was Friends First/F&C which had losses of 7.7 per cent, followed by KBC Asset Management with losses of 7.6 per cent.

"As a result of these recent losses the average managed fund has shown a gain of just 6.9 per cent per annum over the past three years," said Fiona Daly, managing director of Rubicon.

However, the five-year returns remain strong with the average fund delivering a return of 9.8 per cent over the period. The best performing fund manager over five years is Eagle Star with a annual return of 11.2 per cent followed by AIB Investment Managers and Irish Life Investment Managers with 10.8 per cent. The worst performing manager is Bank of Ireland Asset Management with a 7.5 per cent return.

Over 10 years the best performer was Oppenhiem Investment Managers with 7.2 per cent per annum.