The war in Iraq proved a mixed experience for the fund managers involved in the Rehab Great Investment Race as three of them managed to deliver a positive return while the other three ran up losses during March.
A volatile month, during which equity markets rallied on the outbreak of hostilities only to give up their gains amid concern about the progress of US forces, ensured a difficult backdrop for the participants in the race.
We are nearly half way through the contest, which sees the six fund managers take on the market and one another in a bid to make money for the Rehab Group, and the original total investment of €600,000 is just 1 per cent ahead.
Bank of Ireland Asset Management remains secure in the number-one spot after delivering a return of 6.9 per cent in March, bringing its gains to date to 20 per cent. It remains entirely invested in Greencore, which rewarded it well last month.
It is followed in second place by Irish Life Investment Managers, which has managed a gain of 5.6 per cent on its €100,000 investment to date, despite a flat performance in March.
KBC Asset Management was the biggest loser last month, as its fund lost 9.6 per cent of its value to leave it down 7.3 per cent to date at €92,667.
The fund, which had been mostly invested in cash and fixed-income products prior to March, chose last month to dive into the equity market with disastrous results.
"Our timing left something to be desired," admits KBC's Mr David Green of the decision to move out of cash and entirely into equities.
However, KBC is sticking with its investment - which is split between its global equity fund, its top picks fund and its Asian fund - while keeping a close watch on economic indicators and the upcoming first-quarter earnings reporting season in the US.
Behind KBC in the league table and bringing up the rear is Montgomery Oppenheim, which has run up a loss of 9.4 per cent in the race to date. Montgomery's Mr Kevin Gallacher says the fund, which is now fully invested in equities, is keeping an eye out for ways to recoup its losses.
"In the next few months, if we see signs that markets are settling down, we will be more comfortable in taking stock-specific positions," he says.
Meanwhile, Hibernian Investment Managers and Setanta Asset Management occupy the middle of the table, in third and fourth places respectively.
Setanta remains in the red although it logged a gain of 2.2 per cent last month to narrow its losses, leaving its fund at €93,288, down 6.7 per cent overall.
Hibernian moved out of cash into equities and back into cash to realise 1.9 per cent over the course of the month, leaving it 3.7 per cent ahead to date.
But Hibernian's Mr Dara Fitzgerald remains cautious, noting that a lot of very negative economic news had been ignored in recent weeks as investors focused on events in Baghdad.
"The economic and business environment is still very uncertain and very unattractive," he says. Hibernian plans to remain in cash while making the odd foray into equities. "We will be buying after weakness rather than in anticipation of strength."
