PENSIONS: The average Irish pension fund rose by 0.9 of a percentage point in the first quarter of 2002 with New Ireland and Bank of Ireland Asset Management leading the field in terms of investment performance.

According to benefit and remuneration consultants Mercer, New Ireland outperformed all other funds during the first quarter, achieving returns of 3.3 per cent. It was closely followed by Bank of Ireland Asset Management at 3.1 per cent, with both fund managers outperforming the average return.

Two funds failed to achieve the average return, with Ark Life producing negative growth of 1 percentage point and KBC Asset Management's funds down 1.1 per cent in value over the three-month period. The collapse of the Elan share price was the biggest single factor affecting the performance of those funds.

The ISEQ index of Irish shares was also weak during that period, shedding 9 per cent over the quarter.

When Elan is excluded from the index, the rest of the market rose by 8 per cent, suggesting that the top-performing funds did not have large exposure to Elan.

"On average, Irish managers held about 2.3 per cent of their portfolios in Elan, knocking about 1.6 per cent off the average fund's bottom-line return in the year to date," according to Mercer investment consultant Mr John Grant.

Bank of Ireland Asset Management, for instance, had no exposure to Elan.

Outside of the Irish stock market, all of the major indices moved higher over the three months. The Pacific-Basin region, excluding Japan, gained 9 per cent with the Japanese market up 3.4 per cent. The European index, excluding Britain, gained 3.7 per cent. The US market was up 2.2 per cent.

The index for stocks traded in the euro zone was up 1.7 per cent while British equities rose by 1.7 per cent.

Long-term returns are the key performance references for assessing how well a fund is being managed.

For the five-year period, Montgomery Oppenheim emerges as the top performer, achieving returns of 16.6 per cent.

New Ireland comes in second at 14.2 per cent. This is well above the average return for that period of 12 per cent.

Standard Life underperformed over the five years producing returns of 9.2 per cent, according to Mercer.

Over a 10-year period, Eagle Star takes over the top slot with a return of 15.7 per cent. New Ireland follows Eagle Star with returns of 15.7 per cent and New Ireland is in third position at 14 per cent.