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Wednesday, 17th April 2024
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1.4 p.c. return means tough year so far for managed pensions Back  
Volatility and corrections in equity markets show up in the half-year returns for Irish managed pension funds tracked by Mercer actuarial consultants. The highest performing pension fund was Canada Life/Setanta Series D with an 8.3 per cent return in the first six months of the year, including a minus 0.4 p.c. for the second quarter - also the best achieved in that time. The average return for the first half was just 1.4 p.c., while the median was 1 p.c.
When compared with returns sometimes in the high twenties and thirties for the 12 month period, the full extent of the correction in the first half of 2000 becomes clear. For example, the technology oriented Montgomery Oppenheim fund is up 37.8 p.c. over 12 months, but back to 8 p.c. in the half year and down minus 6.6 p.c. in the last three months.

Larger funds, such as those of Bank of Ireland Asset Management and Standard Life, posted returns of 1.7 p.c. and minus 2.9 p.c., respectively, in the half year. At this level, Standard Life suffered most of all, but was followed by other large funds from Friend First and Eagle Star ranked 15th and 14th respectively. On the other hand, KBCAM (included as such for the first time since the purchase by KBC of Ulster Bank Investment Managers) and Irish Life came away from the first six months with joint second place.

The poor state of affairs in markets is reflected in indices for the half year - the ISEQ was down 1.3 p.c., the FTSE UK was down 7.3 p.c., the FTSE Eurobloc was up just 4 per cent, FTSE North American was up 5.3 per cent and Japan was down 3.5 per cent. Mercer records that the three month interbank deposit rate in euro was 1.9 per cent in the period, while the Merrill Lynch EMU government 5 year plus bond index was up 2.5 per cent.

Three, five and ten year returns are clearly still holding up, despite the bad year so far. The averages are 17, 19 and 13 per cent respectively. The leaders over these timeframes are Montgomery Oppenheim, Friend First / Eagle Star (joint first) and KBCAM respectively.

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