The scale of the task faced by the fund managers in the Rehab Great Investment Race was dramatically underlined last month when five of the six funds produced negative returns.
In the contest, six teams of fund managers are pitted against each other and the market for one year. The aim is to make as much money as possible, with all gains going to the Rehab Group.
Only Hibernian Investment Managers continued onwards and upwards, delivering an 8.1 per cent gain to retain the first place position it has occupied since the race began in April.
Judicious timing remained the key to the Hibernian performance as the fund manager continued to invest in a handful of its key funds - cash, technology and telecoms.
It started the month in cash but switched twice, once into the technology fund and then into the telecoms fund, making gains of around 4 per cent on both occasions before banking its profits by moving back into cash.
Hibernian's Mr Pramit Ghose described July as "a Luke Skywalker kind of month" when the force quite simply was with Hibernian. "Twice we felt the markets were due a bounce and we went for it. It was just good old-fashioned instincts, nothing a machine could do for you," he said.
The fund manager has now notched up an overall gain of 53.8 per cent to leave its fund at €153,789, 11 per cent ahead of Bank of Ireland Asset Management (BIAM), its nearest rival with a fund total of €136,789.
Making money in the current climate was never going to be easy but losing it has become a reality.
Both Irish Life and Pioneer now have less money than they started with. The former's €100,000 lump sum has fallen to €97,017, a drop of around 3 per cent, while Pioneer's fund is worth €99,894, down 0.1 per cent from the April starting date, according to Mercer, official monitors of the race.
"It was a tough month but we're confident we'll get back. It's early days yet," said Irish Life fund manager Mr Seamus Magner.
Despite making money on the likes of Vodafone and KPN in July, he was hit by investments in Siemens, France Telecom and Prudential and ended up nursing a loss of 7.5 per cent.
Pioneer also suffered, turning in a monthly loss of 6.6 per cent after the equity funds in which it invested, including the North American Equity Fund, took a pounding. "Markets are extremely uncertain. There is no visibility," says portfolio manager Ms Anne Barker.
Other losers last month included Friends First whose fund lost 1.6 per cent, BIAM which dropped 3 per cent and Setanta which lost 5.8 per cent - although their overall returns remain positive.
However, to put the losses into context, July was a tough month all round, with the ISEQ index and the Nasdaq both losing 5.7 per cent of their value while the FTSE 100 fell by 3.3 per cent over the course of the month.
Most of the fund managers believe that things could get worse before they get better.
"I think there could be more to come, over the next three or four months," says Setanta fund manager, Mr Gary Connolly, whose fund now lies in fourth place overall with a value of €102,488.
Nonetheless, he plans to stick with equities rather than retreating to the safe haven of cash. None of the fund managers is keen to be out of the market when it hits bottom, forcing them to scramble to get back in as its moves higher. But calling the low point is the problem they all face.
As Pioneer's Ms Barker says, "it's like trying to catch a falling knife".
jmosullivan@irish-times.ie
